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Credit Cards -
Falling shares blamed on collapse in consumer spending power - 09/03/2008
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London’s FTSE 100 index showed signs of weakening yesterday with indications of a fall in consumer spending.
At close, the FTSE 100 index was 87.1 points lower at 5,766.4, just above an afternoon low of 5,753.1 and well below the opening peak of 5,871.1.
British Airways and Vodafone both experienced huge trading activity, amid concerns that consumers have less spending power overall, due to cut backs in borrowing on standard payment methods such as credit cards. The result is that banks are placing more pressure on consumers to pay them off as they struggle to loan money as comfortably as 12 months ago.
David Evans, a market analyst said: “Not only is this global credit crunch far from over, there are signs that the crisis is directly impacting the world economy.”
Providers of the essentials such as oil and electricity enjoyed the biggest rises as consumers regard them as harder to cut back on compared to luxury goods. International power was the biggest riser, up 24 pence on close, followed by British Energy which saw an 18 pence rise in its share price.
Consumer groups are angry that energy companies appear to continue to be cashing in on record high energy prices, while consumers struggle to pay their bills.
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