Consumers spending more, despite credit crunch

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Consumers spending more, despite credit crunch

Wed 24th Dec 2008

UK consumers as a whole spent more in the third quarter of 2008 than in the three months preceding it, according to data released by the Office of National Statistics (ONS) today.

Overall consumer spending rose by 0.7 per cent at current prices, despite the credit crunch.

However, this figure represents a slowdown in the growth of consumer spending by 0.2 per cent in volume terms, once seasonal adjustments have been taken into account.

The ONS report said: "In the third quarter of 2008 the only two areas of growth were clothing and footwear which increased by 1.8 per cent and recreation and culture, which increased by 1.7 per cent."

Gordon Brown’s government recently unveiled a 2.5 per cent cut in the standard rate of VAT.

The move, announced by Alistair Darling in the pre-Budget report, is aimed at persuading consumers to spend more.

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