How much should I spend on a guitar?

This is really up to yourself.

Try to buy the best you can afford. Nowadays there are some quite good quality beginners instruments around. I would recommend spending a minimum of £100 if you are buying a guitar that is brand new. It can often be worthwhile checking the second-hand market too, although it may be a good idea to get the advice of someone you know who plays the guitar before you buy from a private seller.