The average family’s fixed living costs have increased by 16% in the past three years and now swallow up more than half of their income leaving less and less to spend in shops and restaurants.
According to a recent report by the accountancy firm the average monthly mortgage payment is £60 more than it was in 2002 and other debt repayments have increased by 17% over the past two years.
This, and a rapid slowdown in house prices inflation which has removed the consumer’s psychological cushion of apparent wealth, resulted in an increase in retail sales of just 0.1% in May.
Tim Sleep – Head of Retail at Ernst & young – predicted that sales would continue to fall by 2 –3 % this year and Richard Ratner of finance house Seymour Pierce said: - “The malaise is unlikely to be just a six or twelve month phenomenon but could last for two to four years”
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Ernst & Young