Consumer spending is set to dip over the next six months.

A UK-wide Mori poll of nearly 2,000 people in June, carried out for Direct Line Financial Services, found cautious consumers were choosing to save up rather than borrow to make major purchases.

Respondents were asked about major goods and services they had bought in the last six months and about what they were intending to buy in the second half of 2000.

The majority were intending to spend their cash on home improvements, rather than buying cars, which was the most popular area of spending in the six months to June.

Andy Marchant, managing director of Direct Line Financial Services, said the methods used in the survey - only asking about major purchases valued more than £1,000 - enabled analysts to get a clear picture about the health of the British economy.

He said: "This survey backs up the forecast for lower growth as the economy slows. With the exception of personal loans, our findings suggest that demand for consumer credit is likely to decline.

"With a few exceptions, this paints a picture of a cautious consumer who plans to pull in their spending and borrowing reins in the latter half of the year."

While more than a quarter of respondents reported spending more than £1,000 on a single item in the last six months, only 21 per cent said they were intending to do so by the end of the year.

Cars were bought by a third of such buyers in the first period but only 26 per cent of those intending to make a major buy said a car was on their shopping list.

A spot of DIY was increasingly on the agenda however. More than a third said they were going to do some major home improvements, compared to 26 per cent who said they had already done so.