Britain faces the weakest growth in consumer spending since 1992 because of the impact of the credit crisis on household interest payments and the downturn in the housing market, according to a new analysis. Sunday Times
The analysis, by Citigroup, suggests spending will rise just over 1% in 2008, after an increase of more than 3% this year.
It also says 1.7m households will face a “reset shock” in the coming months, with the interest they pay rising more than 1% as existing fixed-rate and discount mortgages have to be renegotiated.
According to another analysis by Fathom Consulting, Britain runs a high risk of 'stagflation' weak growth and high inflation next year. It calculates the probability of UK growth of less than 1% in 2008 at 35%.