UK High Street in for a challenging time says think tank

| May 16, 2011 | 0 Comments
UK High Street in for a challenging time says think tank

Respected think tank, Ernst & Young ITEM Club, has today said UK retailers are in for a tough time as household incomes become even further squeezed amid rising inflation and soaring energy bills.

The think tank is forecasting consumer spending to rise by just 2% a year in the next decade as family finances are stretched.

Furthermore, many analysts are predicting interest rate rises this year in a bid to tame inflation, and this will have a profound impact on household incomes and consumer spending.

Commenting on its report, Andrew Goodwin, chief economic adviser to the ITEM Club, said: “The squeeze on household budgets is only going to intensify this year, as the gap between high inflation and subdued wage growth continues to widen and we experience a second consecutive year of declining disposable incomes.”

Finally, the think tank believes small independent shops, unable to compete with larger stores, will suffer the most.

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