Job Security Fears

A survey of 2,000 adults by Lloyds TSB showed that almost a third believed their job was less secure than a year ago, while 61% thought they were the same, with just one in 10 saying they were better.Almost two thirds of those polled said employment prospects across the UK were worse, with just 5% saying they were better.

Consumers also feared that food and fuel prices will continue to rise over the coming 12 months and predicted that interest rates will rise.

Trevor Williams, chief economist at Lloyds TSB Corporate Markets, said: "The combination of falling employment confidence and rising inflation expectations is a lethal cocktail for consumer spending...The survey results suggest that spending growth is likely to slow sharply in the months ahead. 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.

"The survey shows that consumers are bracing themselves for the worst when it comes to the squeeze on the household purse...Should the Monetary Policy Committee be forced to increase rates over the months ahead, then at least this will come as no surprise to consumers and limit any negative reaction."