London rich cut back spending

Even London's super-rich are cutting their spending on luxuries, with the rise in prices of exclusive goods slowing by half.

Top-end property rental prices have been flat in the past year against the previous five years, when they rose by 25%.

Wealth management group Stonehage says its index of luxury goods price growth in the capital has fallen from 6% to 3.3%.

The Stonehage Affluent Luxury Living index (Salli) found the capital's very rich were cutting spending, and had even driven prices down in some categories. Luxury goods deflation is evident among several items in Salli's "investments of passion" category, including cars and luxury watches.

But fine wines are 45% dearer than a year ago and art prices are up 37%.

"Salli's fall from last year's high levels at three times CPI is another indication the economic outlook is deteriorating. We remain cautious and conservative," Robby Hilkowitz, Stonehage's executive director, said.