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UK consumers slow down spending due to credit crunch
24/04/2008 14:07:00
The effect of the credit crunch has resulted in consumers slowing their rates of spending due to increasing fears of debt, new research has shown.
Findings from the Alliance Trust index revealed that the net wealth for the UK has stopped growing due to a decrease in the value of equities and the cooling of the housing market.
The firm blamed low disposable income growth, high council taxes and rising mortgage payments for putting household budgets under strain.
Shona Dobbie, head of Alliance Trust Research Centre, said that consumers are starting to feel the pinch of financial reality.
"Our measure of consumer wellbeing shows households are facing increased headwinds in terms of their finances, as food and energy prices move higher, house price growth slows and equity markets decline," she said
The Alliance Trust predicted that consumer spending will slow even further during the next 12 months.
Previous research from the firm revealed that food price inflation remains close to six per cent while electricity prices have risen by more than five per cent during the last year.
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