Slowing of consumer spending is “worrying”

Despite the economy growing by 0.6 per cent in the last quarter of 2007, consumer spending slowed dramatically, according to new figures.

Findings from the Office for National Statistics (ONS) showed that increases in household expenditure fell to 0.2 per cent, a drop from the 0.9 per cent previously seen in the last quarter and the weakest growth since 2006.

Speaking to theherald.co.uk, Howard Archer, chief UK economist at consultancy Global Insight, said that the breakdown of the ONS’ data was worrying.

“The faltering in consumer spending, business investment and exports in the fourth quarter increases concerns that UK growth will slow markedly in 2008 and increases pressure on the Bank of England to cut interest rates again sooner rather than later,” he said.

According to the figures, business investment and exports also faltered at the end of last year, declining by 0.5 per cent and 1.2 per cent respectively.

Meanwhile, Tim Besley, member of the Bank of England’s Monetary Policy Committee, told the Daily Mail that a reduction in the rate of consumer spending was worrying.

Tags: england, drop, chief UK economist, Office for National Statistics, Daily Mail, Business Finance, UK growth, Global Insight