Reluctant spenders could have 'enormous impact'

Monday, May 10th 2010

Consumers may be more reluctant to spend money and small businesses will be affected by a loss in trade.

This is the warning of Anne Mitchell, spokesperson for Unison, who said uncertainty will have an "enormous impact" on the British economy.

"People are reluctant - they don't want to spend their money, so that is going to have a knock-on effect on local businesses," she says.

A number of Britons may face job losses, meaning they are unlikely to spend money in shops and restaurants.

Ms Mitchell's comments follow the results of the UK general election last week, which resulted in the first hung parliament since 1974.

No party achieved a majority of parliamentary seats, although the Conservative Party gained the most votes.

According to Ms Mitchell, local businesses could face a number of negative effects, including potential council cuts on services.

And the wider economy may see more people claiming benefits and fewer tax payers as a result, she added.