As Brighton gets into the festive spirit with its dazzling new Christmas lights display some analysts are predicting a good season for retailers. However, others believe the recent interest rate hike could have a detrimental effect.
According to analyst, Morgan Stanley consumers are planning to spend as much as 30% more on their credit cards this Christmas compared with last year.
Business advisory group Deloitte has predicted an increase in spending of around 22% per person on gifts and gift vouchers. This would bring the average spend per person to £378 or £17 billion for the nation as a whole.
If these predictions come true Christmas 2006 will be the best we seen in the last 12 years.
However, it is not all good news. High street stores and specialists shops will do well but hotels, restaurants, bars and entertainment venues may suffer. It would appear that while the nation is splashing out on gifts it is paying for it by staying home rather than living it up in town.
The Deloitte survey indicates that spending on entertainment will be down by 16% compared to a year ago. This equates to a fall to £121 per person on average.
According to the survey shoppers are also opting to seek out interesting independent and high street shops for their gift purchases rather than buying from superstores. This is indeed good news for Brighton.
HSBC is a little less optimistic predicting that the recent interest rate will encourage people to spend less this Christmas and try to save more.
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