Moneyfacts: Consumers 'failed to adapt quickly' to economic downturn

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Moneyfacts: Consumers 'failed to adapt quickly' to economic downturn

Fri 8th Aug 2008

Consumers could have adapted their spending if the economic downturn had happened more slowly, financial information adviser Moneyfacts has said.

Spokesperson Darren Cook said it has only been in the last three to four months that the slowdown "has knocked on the front door and actually affected the consumer".

He said if it had happened more gradually over a one or two-year period "then people would have been able to adapt their household expenses".

Mr Cook added that retailers would be affected because of the amount of money available to be spent, and said the Bank of England should increase the base rate "to counter spending and encourage saving".

According to the Nationwide Consumer Confidence Index, in partnership with TNS, consumer confidence fell by 11 points to 51 in July.

Reasons given were the gloomy economic outlook, falling house prices, job losses and increases in living costs.

Consumer confidence overall is 18 per cent lower than this time last month and 46 per cent lower than a year ago.

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