Consumers must tighten their belts and re-evaluate their budgets in order to deal with the prospect of a recession, it has been suggested.
According to a recent survey from the British Chamber of Commerce, businesses are beginning to feel the pinch of the credit crunch and rising costs, with home sales and recruitment levels set to plummet even further.
David Kuo, head of personal finance at Fool.co.uk, said people needed to "think about living on two-thirds of their salary" and put money aside for the future.
"Cut out any big purchases that you were planning, try and conserve as much cash as you can and think seriously about income protection now.
"Income protection will protect any income you have in case you were to face a redundancy and that at least will give you some breathing space before you find your next job," he explained.
Consumers can also make savings by shopping around and finding the best deals on essential items such as car insurance and travel insurance.
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