UK - Pressure on consumer spending adds to woes

The consequences of the losses affecting the financial sector around the world are already becoming apparent in terms of tighter lending conditions, which will inevitably lead to a period of economic softness in many western economies. Lingering concerns on inflation have meant that central banks have been slow to respond to this weakening outlook, such that it will take some time before the beneficial effects of lower interest rates are felt. Coupled with rising energy and utility bills, this is likely to keep consumer spending in the UK under pressure. We are cautious in particular on r...