Business Recovery and Insolvency Practitioners

NEWS: Consumer Confidence Dips

Added: 12/01/2007

Businesses are facing difficult times in the current financial climate, those businesses without management skills to take advantage of a changing market place, that is caused by a shift in fashion, new markets, and the ability to source low cost production whether it be here or overseas will find it difficult to succeed.

A larger proportion of people are now directly or indirectly employed by the Government and as the media has outlined, public sector numbers and their costs and pensions have risen out of control.

With the increase in house prices many economists believe that the economy is mortgage and credit card driven, however, with the ever increasing costs of living and with interest rates on the increase, people are finding it harder.

Consumer confidence slid further during the month of December 2006 with downbeat assessments over jobs and the economy.

Faith in the future perfornance of the economy has slid and the proportion of consumers who believe there will be fewer jobs available by mid 2007 has risen to its highest level at 36%.

It appears that in general people were much less happy at the end of 2006 than at the start of the year and they are even less confident about the future.

Inflation is supposed to be under control and standing at circa 2.75%, although it has been well reported in the media that utility and fuel bills have increased in excess of 25% during the last 18 months

Nobody really knows the true level of inflation, but in my office we feel that the true underlying percentage is nearer 10%.

There is an expectation that house prices will continue to increase at a rate of 10% during 2007 although some pundits feel that this may be nearer 15%.

This is against a backdrop in the record numbers of people going bankrupt or entering into an IVA.!!!

There are differing numbers coming out from the retail sector during the last quarter of 2006 and clearly numbers in some sectors are down compared with the corresponding period of 2005.

As a nation, we have a combined borrowing in excess of a trillion pounds and the Government's increase in spending has been ahead of GDP growth for some years.

History has taught us that there are peaks and troughs with any economy and I believe that when the turn comes it will be far reaching, I have been saying this for the last eighteen months and have been wrong so far!

Stephen Wainwright, Partner.

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