Job security fears slow spending

Mon 4 Aug 2008 at 12:39 PM

Consumers are increasingly worried about job security and are less likely to spend their wages, a new study has found.

According to research by Lloyds, more people than before are worried about the security of their jobs, which will result in reduced levels of buying.

Trevor Williams, chief economist noted: "If people don't feel safe in their job and high prices are putting incomes under pressure then demand for discretionary purchases will naturally slow."

It found 12 per cent less respondents believed employment prospects are better now than 12 months ago.

"The combination of falling employment confidence and rising inflation expectations is a lethal cocktail for consumer spending," Mr Williams added.

The study reported 88 per cent of those questioned said prices will continue to rise this year and inflation will reach 4.8 per cent.

Recruitment agencies specialise in placing workers into new commercial jobs.