Bleak winter in store for retailers

RETAILERS' fears of a dismal Christmas increased today as a report showed London's debt-laden consumers are ready to rein in spending.

Worries about rising interest rates, higher petrol costs and a rapidly cooling housing market have driven confidence to its lowest level this year.

The report from economic forecasting group Experian reveals a net 6% of Londoners intend to spend less on big-ticket items, such as household appliances and furniture, over the next 12 months against 1% three months ago.

Melanie Lansbury, associate director of Experian's Business Strategies division, said: 'Evidence suggests retailers will face more difficult times over the coming year, with more pressures on household disposable incomes, especially with higher mortgages.

'Despite attempts by retailers to stimulate spending with attractive discounts on credit, high-value items such as cars, plasma TVs, PCs, digital cameras, audio systems and mobile phones have already experienced, and will continue to suffer, weaker spending.'

The report's consumer confidence index - a measure of Londoners' feelgood factor - fell to 17 in the third quarter from 21 in the previous three months. The UK average is 18.