Downturn 'too rapid' for consumers to adapt, expert suggests

07/08/2008

The sheer speed of the economic downturn has caught many consumers unaware - and has meant that many have simply failed to prepare in time for the tough conditions.

New analysis from financial website Moneyfacts.co.uk suggests that, had the effects of the credit crunch and rising food and fuel prices happened more gradually, many more people would have made the necessary changes in their household expenses.

Darren Cook, head of public relations at Moneyfacts.co.uk, said: "It's gone from one extreme to another and it's caught people out. We've gone from the crest of the wave to the wave hitting the shore in such a short time that people's perceptions and confidence has dropped."

The comments were made following the release of the latest Consumer Confidence Index from Nationwide, which showed an 11-point fall.

Overall confidence is now 46 per cent lower than it was a year ago - while 61 per cent of people polled by the lender termed the current economic situation as "bad".

Commenting, EuroDebt director Kevin Still added: "Consumer confidence is always likely to be rocked by major adverse events outside of their control where the man on the street relies on the government and major institutions to maintain the status quo.

"With a 9.5 per cent rise in food bills, a 35 per cent rise in energy bills, a 20 per cent drop in pension values and a 100 per cent increase in fuel costs, these just add to consumer uncertainty and loss of confidence that genuine support and assistance is available for families really struggling to make ends meet."

Tags; Housing Debt and Bills, Debt Management and Banking, Young Family Finances, Credit Card Lifestyle,

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