Retailers and manufacturers might benefit from tempting customers with piggyback and expanded content labels, after an expert warned that spending activity is likely to stay subdued.

According to Howard Archer, chief economist at HIS Global Insight, consumer confidence in the UK is extremely weak at the moment.

This, he said, means there is some concern that people will be "very cautious" with their spending over the next few months.

Mr Archer stated that the issue is being exacerbated by the possibility of an interest rate hike in the near future.

He described the likelihood of an increase in the cost of borrowing by the Bank of England as "very real".

Mr Archer warned that this "is not good news for consumer spending prospects".

This could prompt retailers to invest in ways of offering better value and more enticements to shoppers, such as promotional labels and coupons.

The warning comes after Stephen Robertson of the British Retail Consortium acknowledged that shoppers are "seriously concerned" about mounting financial pressures.

Denny Bros Ltd, 01 April 2011