Trade slips as consumers keep wallets in pockets
Hairdressers - 08/09/2006 13:56:36
Travel agents, hairdressers and cinemas were at the sharp end of a dip in consumer confidence, according to a new survey.
Conducted by the Confederation of British Industry (CBI) and accountants Grant Thornton, figures showed consumer spending on services and retail outlets suffered when the Bank of England announced it was to increase interest rates.
This led 29 per cent of businesses polled to claim that they are less optimistic about their future business prospects than they have been in the previous three months.
"Consumers clearly have felt the need to rein in their spending on services in response to the higher petrol and utility prices that they have had to grapple with, as well as the higher cost of borrowing," said Grant Thornton's Steve Edmonds.
According to 35 per cent of firms questioned by the CBI, the volume of trade and business had fallen by its sharpest amount since November 2001.
Businesses have been unable to pass on the higher costs they have incurred because of the dip in consumer confidence which is bring held back by the threat of further interest rate hikes.
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