Consumers still planning to cut back on spending despite economic growth

27th January 2010, 12:33pm

Despite yesterday’s announcement that the UK has emerged from recession, the vast majority of consumers are still being cautious and planning to cut back on spending.

New research from accountancy software company Accountz shows that 52% of Brits will spend less. Just 4% said they would spend more money during 2010.

The research found that whilst 61% of consumers feel that the recent VAT increase is fair, almost half believe that they will notice an obvious change in retail pricing in 2010 and will cut down on spending accordingly.

Consumers also said they believe raised prices to be most evident in grocery shopping, holidays and hotels and restaurants and bars.

Quentin Pain, founder of Accountz said: "This survey highlights the financial insecurity that is rife amongst Brits at this current moment in time. As much as we would like to support our retail industry and purchase items as frivolously as we once did, we are clearly evolving and becoming more savvy with our finances, even though we rarely budget and forecast as we probably should.

"The VAT increase is a major bone of contention for both retailers and consumers. Whilst it was inevitable, it is quite likely that it will impact heavily on consumer spending at a time when the high street is already in disarray and customers are staying away. It looks like 2010 could be quite a challenging year all round."

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