Consumer Spending Worries Hit London Stocks
London stocks have dipped for a third day as research reveals incomes in Britain are continuing to fall and households are reluctant to take on more debt.
The economic downturn and high levels of inflation have hit UK incomes, according to the Office for National Statistics.
It found national income per head fell by more than 13% this year, compared to its pre-recession level at the start of 2008.
"An over-reliance on the housing bubble and personal debt exaggerated income growth in the run-up to the recession," the TUC's general secretary Brendan Barber said.
"Now families have been hit by the biggest squeeze in their living†standards in nearly a century."
Meanwhile, a separate study found, despite the tough times, households have "no appetite" to take on more debt.
Financial uncertainty was having a "dampening" effect on companies and households, the British Bankers Association (BBA) said, adding that demand for loans remains weak.
It found unsecured borrowing through loans and overdrafts fell by 7.7% in the year to September, as people continue to save.
The negative outlook for consumer spending - combined with Mulberry's surprise profit warning - helped drag the FTSE 100 to a one-week low.
Mulberry's rival Burberry - which also warned on profit last†month - was one of the biggest fallers on the index, which had fallen by around 1.3% in afternoon trading.