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Spending down as job fears continue


Monday November 1st 2010

Householders have reduced their spending at the fastest rate in nine months amid continuing fears over job security, according to a survey.

In figures released by financial information group Markit, 27% of people said their household finances had worsened in October, with 45% expecting them to decline further during the next few months.

People also reported a rise in debt for the first time since January, as well as a moderate decline in their income.

Households were also still battling with inflation, with 67% saying the cost of living had risen during October. Despite this, the group's inflation perceptions index was still slightly lower than the series high it reached in September

Job security remained a major worry during October, with 24% of people believing their jobs were now less safe than they were in September. Public sector workers unsurprisingly reported the sharpest fall in job security.

The group said its findings would add to worries that fragile consumer demand could destabilise the economic recovery.

Tim Moore, economist at Markit, said: "With people adjusting their own spending in response to anxiety about future finances, the wider economy may be set for an extended soft patch before we see the long-term gains from the deficit reduction and benefits to the private sector of a leaner government."

Copyright © Press Association 2010

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