Spending habits ‘shifting’ as credit crunch takes hold

More and more British consumers are changing their spending habits in response to the credit crunch and its impact on their finances, it has been suggested.

According to data compiled by the Fair Investment Company, around 13 per cent of Britons are aiming to reduce the amounts they spend on luxury items, while 16 per cent plan to save money by not taking a holiday they otherwise might have.

In addition, with millions of people facing debt management pressures, fewer and fewer credit consumers are looking to borrow more money as they try to reshape their financial arrangements.

David Doulton, director of Fair Investment, said: “The small number of people who plan to get more credit just shows how the economy has changed.

“This time last year our results would have been very different because credit was easier to come by and seen by many as the easy way out.”

Last week, Howard Archer, chief European and UK economist at Global Insight, suggested that the Bank of England is under significant pressure to ease borrowing costs around the country by cutting the base rate of interest.