Confidence wavers as fiscal squeeze looms (Jun 10)

Although the latest news has been mixed, consumer spending on the whole appears to be holding up well. But there are other signs that cracks in the recovery are appearing, including recent falls in consumer confidence and borrowing. With the emergency Budget on 22nd June likely to contain significant tax rises and government spending cuts, confidence could take a further knock, while consumer incomes face an intense squeeze. Consumer spending may continue to hold up in the very near-term, but the outlook remains pretty bleak.