A new report by the National Institute of Economic and Social Research predicts the consumer credit crunch will cause household spending to slow down in 2008. It predicts that household spending will hit the buffers in the second half of the year and the economy will only grow by 1.8%. It also suggests that the main reason for the downturn will be consumers turning their backs on shops, bars and restaurants. The public will also curb their spending habits and boost savings, says the report, as they are hit by a fall in house prices and a squeeze on borrowing. Growth in consumer spending will only be 1.2% this year – down by half from last year's 3%. The rate is expected to halve again by next year to 0.6%. Conversely, the household savings rate is expected to grow from 2.9% to 6.5% by 210. The report states: “The UK has been reasonably adept at weathering previous global storms. “However, the unfolding news on the current shocks to the economy suggests that they will be more difficult to offset than others seen since 1997.”