Many people plan to rein in their spending

According to research carried out by MoneyExpert many consumers may be looking to rein in their spending, as the credit crunch continues to affect household finances.

The report shows that millions of people may be set to cutback on their spending in a bid to try and bring their finances under control.

The report shows that over the coming year around 57% of consumers will be cutting back on their spending levels, which means that one in every six of us will be trying to tighten up on our spending. Many are planning to cut back on basics, with around 23% of consumers looking to cut back on the amount that they spend on food.

There are also other areas in which consumers plan to rein in their spending, with 31% of consumers looking to cut back on the amount that they spend on clothes, and 32% looking to reduce the amount that they spend on going out and entertainment.

Many had also decided not to move house or purchase a new car because of the costs involved.

One official involved in the research said: ‘The credit crunch is moving on from being something that just affects bankers to having real effects on real people in the real economy.’

He added: ‘There is however a risk that we could talk ourselves into a recession by panicking unnecessarily. Certainly anyone who is struggling financially should be taking action but that has always been the case. There are still plenty of good deals out there and people with good credit records still have plenty of choice.’