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Job fears depressing consumer confidence

UK workers' confidence about the security of their jobs is at its lowest for at least 32 months, according to the Lloyds TSB consumer barometer.Just 18 per cent of the 2,000 consumers surveyed said they were more confident about job security today than they were 12 months ago â€" the lowest rating since Lloyds TSB began its barometer in November 2004.Although consumers were more upbeat on the UK's overall employment prospects, their pessimism about their own job security has been caused by increased expectations of further interest rate hikes from the Bank of England.A positive balance of 75 per cent believes the Bank will raise rates in the next 12 months, up from the 70 per cent balance seen in May. Lloyds TSB says this reflects analysts' belief that rates could rise to 6.25 per cent by early next year."Consumers have been holding their breath waiting for another interest rate rise and the majority obviously see it as a fait accompli," Trevor Williams, chief economist at Lloyds TSB Corporate Markets, said."However, the combination of interest rate hikes and consumers' correct expectation that prices are on the rise means the spectre of unemployment is now beginning to weigh more heavily on respondents."This realisation is another sign that the last few rate rises are beginning to have an impact. The next stage is for these fears to translate into consumers actually cutting back on their spending and so weakening economic growth in the manner that, after all, the monetary authorities want to see and, in our opinion, will see in the months ahead."

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