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James Qualtrough (Jamesq) is the Founder and Editor of Isle News and is based on the Isle of Man. Isle News is a news site for the UK offshore jurisdictions of the Isle of Man, Jersey and Guernsey.

CONSUMERS SEE A FUTURE OF HIGHER PRICES

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Related category: Finance & Business, Isle of Man
(Isle News) Author: Jamesq on Wednesday, April 22, 2009

Isle News, 22 April 2009 – According the latest Consumer Barometer from Lloyds TSB Corporate Markets, consumers expect to see an increase in prices over the next year.

The main reason given for this is because of the high cost of living against minimal pay rises across the board.

A survey of 2,000 UK consumers in March found 51 percent predicted prices will have risen in 12 months’ time, compared to 48 percent in February. The balance of consumers who predicted higher rather than lower prices, rose for the third consecutive month, up by almost a tenth in March, to 35 percent.

Jonathan Potts, Senior Manager of Personal Banking in the Isle of Man, commented: “We feel that Manx consumers are also very much preparing themselves for a real hike in prices over the next 12 months. When asked what the official rate of inflation would be in a year’s time, UK consumers estimated 4 percent, which is up from 3.7 percent in February. This was the first increase in the estimated figure since November 2008.

“Looking at the UK as a guide, even though the actual Consumer Price Index surprisingly rose to 3.2% in February, all other data suggests prices will be coming down. For example, the economy continues to weaken and utility firms have signalled their intention to cut prices.

“But it is not surprising that people still feel prices will rise. For many the cost of basic living, such as food and travel fares, remains high, particularly as pay rises are likely to be minimal this year. Unless consumer price expectations ease in the coming months, this feeling, coupled with expectations that interest rates will also rise, means we are unlikely to see a change to consumer spending habits just yet.”

ENDS

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