Spending Slowdown: Good news?
Consumer confidence in Britain is on the wane according to a study by one of the county’s leading retail organisations.
The British Retail Consortium reported that retail sales were slowing.
According to the report, sales roses by 1.5 per cent last month, this compares to a rise of 3.3 per cent in February 2006.
People were still shopping, but price was an increasingly important factor for most consumers.
“Shoppers are still very price-conscious and reluctant to splash out on major purchases, so discounting was still needed to tempt customers to buy,” the consortium reported.
Even with strong food sales the slowdown in consumer confidence should put downward pressure on inflation.
The Bank of England’s Monetary Policy Committee (MPC) has played a conservative hand lately.
It has maintaining interest rates to see how the fallout from the US affects the domestic economy.
But with consumer spending down and confidence falling, it should be enough for the MPC to consider dropping rates.
There is increasing instability however with increasing wage pressures and high energy prices rising costs.
For the homeowner it might be time to lock in an interest rate, or ensure that you have enough income to cover any interest rate increases.
