A report from the British Chambers of Commerce (BCC) suggests that growth in the third quarter is "considerably slower” than the quarter two and the British Retail Consortium (BRC) reports that the service sector is showing particular weakness.
At the same time as the BRC confirmed that retail sales growth slowed last month [0.5% increase from September 2009], the BCC warned that businesses faced serious challenges in the coming months.
The BRC said consumer confidence was "fragile" ahead of the government's spending review and proposed VAT increases in 2011 and consequently consumers were cutting back on expensive purchases, such as cars, kitchens, bathrooms and household furniture.
The government is due to outline its four-year comprehensive spending review [CSR] on 20 October, and is expected to announce substantial spending cuts as it continues to reduce the public deficit.
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Comprehensive Spending Review
British Chamber of Commerce
British Retail Consortium