UK retailers are facing the 'calm before the storm'

Date: 15th July 2010

UK retailers are set to notice a reduction in consumer spending in the months to come, it has been suggested.

The British Retail Consortium (BRC) has said that many businesses are facing a "calm before the storm" as the effects of the Budget have not yet been felt.

The comments come despite a recent report from Barclaycard, which revealed that the amount spent on credit and debit cards was 9.9 per cent higher in June than in the same month last year.

Richard Dodd, a spokesperson for the BRC, said an increase in card spending is not necessarily indicative of an overall rise.

"People heard the Budget last month and know that some really tough measures are coming in terms of the VAT increase at the start of next year and also cuts in public sector spending and public sector employment," he said.

"The effects of those measures have not yet been felt. So I think consumer confidence will take a serious knock once the impact of that is actually felt, but for the moment spending has not been hugely affected."

Posted by Jacob Williams