LONDON (AFX) - While UK first-quarter 2001 consumer sentiment rose to its highest level since mid-1999, the wave of "actual or possible" job cuts could undermine confidence as the year wears on, according to a survey conducted by Business Strategies' consumer research arm, Consumer Futures.
The report revealed that in the run-up to the general election, consumer confidence has been largely unaffected by the foot-and-mouth epidemic and its knock-on effects. People seem equally oblivious to the potential effects of the U.S. slowdown on the UK economy.
Richard Holt, director of Consumer Futures said high profile news of layoffs could affect sentiment.
"Job losses can sometimes have a disproportionate effect on sentiment. Job cuts announcements have so far focused on electronics, but there is also anxiety that the City may be poised for one of its periodic job culls," he added.
He said that while consumer demand appears set to expand at moderate level, over the whole year, the rate of increase is likely to slow to about 4.5 pct.
Turning to the foot-and-mouth epidemic, the report said that the disease could hit the hospitality industry by 2 bln stg.