Consumers spending habits are being hit hard by interest rate rises, says the Confederation of British Industry (CBI).
The CBI’s latest distributive trade’s survey, which covers the first half of June, shows that retail sales Have grown more slowly than expected for the second month running.
For 20 per cent of retailers, sales were down, for 37 per cnet they were up, and although the balance of +17 is in line with the long-term average, it is still the lowest since November last year.
Asda’s executive director, John Longworth, is chairman of the CBI's Distributive Trades Panel, and says the slow down in spending can be attributed to rising inetrest rates.
“This survey shows consumers are reining in their spending in response to higher borrowing costs, “he said.
“A slower housing market is making its impact felt, in particular on sales of consumer durables and more expensive household items. But shoppers are also curbing their spending on everyday things such as groceries and a month of mixed weather did not inspire people to buy new summer clothes.
“Because shoppers’ pockets are going to be that bit less deep, retailers will be working harder to attract and keep custom in an even more competitive marketplace.”
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