BUSINESS - 12 October 2016 - by BlogLux
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UK 'most affordable' luxury market in world

Spending by Chinese visitors to the UK has surged by almost a fifth

The UK has become the most affordable market for luxury goods in the world but shoppers from overseas may only have a limited time to cash in, it is claimed.

Analysis by Deloitte said the UK topped the affordability stakes in the immediate aftermath of the country's vote to leave the EU in June - occasionally losing ground because of currency movements.

But it said the collapse in the value of the pound meant that visitors had generally been able to secure the best value for themselves in the UK since 24 June.

Its research highlighted several examples - including a Louis Vuitton speedy 30 handbag costing shoppers visiting the UK $802 when converted to local currency versus $970 in the US and $1,115 in China.

Pedestrians cross the road as the sun rises behind Big Ben earlier today

The cost of a Balenciaga Foulard Fringe dress was $450 more in the US, it said.

But Deloitte warned it expected a looming price correction from top brands.

Nick Pope, fashion and luxury lead for Deloitte in the UK, told Sky News a "handful" were already responding to lift their margins through price increases to help offset the 17% decline in the value of the pound against the dollar.

"From our analysis, 84% of prices were unchanged, 12% had been increased and, weirdly, 4% were decreased.

"What brands don't want to do is put consumers off.

"Over half of the UK luxury market is driven by the tourist ... and China is the country offering the scale of growth.

"Each brand must think how do I want to balance my appeal to the domestic shopper versus the international tourist shopper."

He expected a "reaction" on pricing within six to 12 months.

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The figures were released as a separate study pointed to a record July for tourism to the UK - the month after the referendum result was declared.

While many trips would have been planned in advance, VisitBritain reported a 2% increase in overseas visitor numbers on the same month in 2015 to 3.8 million.

Their spending, it said, rose by 4% to £2.5bn while forward looking bookings for this autumn are up 6%.

Its statistics also highlighted the growing importance of China to the UK tourism industry, with visits rising 46% in the last financial year and spending up by 18%.