A City survey shows a “fundamental consumer recovery” in the UK is not yet in sight.
It is clear that consumers remain cautious and stock broker Execution believes discretionary income could fall by 5% in 2010.
For the retailers it believes this situation will be exacerbated by a potential further rise in VAT, as 34% of consumers indicate that they would reduce volume of purchases.
Caroline Gulliver, analyst at Execution, said: “Our survey of 2,000 UK consumers suggests that they think that their financial position has got worse this month and our analysis suggests that consumer discretionary spend could fall by 5% in 2010.”
Consumers’ perceptions of their current financial situation deteriorated this month, despite the picture on house prices improving, whilst confidence has flatlined for six months now. Consumers remain nervous about the prospects for the year ahead, said Execution.
