/24-7PressRelease/ - LONDON, UK, September 06, 2007 - A latest survey by the Confederation of British Industry and Grant Thornton reveals a sluggish demand in the consumer services sector. Five interest rate rises in the last one year has led to discretionary spending by the consumers.
During the last three months, sales across the leisure, personal care and travel sectors have got affected. In contrast, the professional services like accountancy, law and property saw a buoyant quarter with strong business volumes and value growth. The high interest rates have also affected the borrowers taking out secured loans and personal loans.
Martin McAfferty, adviser at the Confederation of British Industry said: "Consumer services firms don't expect to expand their businesses in the coming year. Costs are expected to continue growing at a rapid rate, with less scope for firms to raise prices, which will inevitably put profit margins under greater strain."
Alysoun Stewart of Grant Thornton said: "Optimism levels among consumer services firms have plummeted to levels not seen since February 2003, clearly indicating that successive interest rate rises over the past year have begun to bite."
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