The Economy Watchers index - a survey of barbers, taxi drivers and others who serve the general public directly - was down again in June, falling to 29.5 (a six year low) from 32.1 in May, according to data from the Cabinet Office today.

The forward looking index for conditions in two to three months time slid to 32.1, its worst reading since September 2001 (down from 35.1. in May).

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Obviously, the combination of rising food and energy prices and pressure on wages is now hitting people. A record 88.9 percent of those interviews expected prices to rise over the next 12 months according to last week's Bank of Japan survey, while an unprecedented 58.7 percent said they were going to cut spending.

Again, this is not particularly surprising since the latest data show that wages only were up 0.2 percent year on year in May, while the prices of the most frequently purchased products grew 2.4 percent.