Three weeks after the Belfast Telegraph began the Pricewatch campaign, there are signs that retailers are taking note of the pressures on consumers and cutting costs.

The real test, however, is still to come. Hallowe’en is barely rolling into sight from over the horizon and shops are already gearing up for Christmas.

This is the most important season of the year for retailers. Spending at Christmas means the difference between profit and loss for the retail giants, and for smaller outlets it can mean the difference between the difference between opening or closing in January.

It’s been symptomatic of concerns about the economy in recent years that every Christmas shopping season is greeted with sharp intakes of breath and chewed nails from economists who worry that consumers would rein in spending and pull the rug out from under the economy. In each of those years, the fears have usually been unfounded: shoppers spend, and retailers breathe easier as the calendar turns.

This year looks very different.That’s in large part because financial concerns aren’t just rooted with economists who read runes that the rest of us don’t understand.

This year, anyone who does a weekly shop or fills a car with petrol or pays a mortgage knows that economic circumstances are very different. The knowledge that home heating, electricity and other major bills are climbing, while income remains static, will be a major curb on spending.

The plummet in the property market, the instability surrounding major banking institutions and the uncertainty infecting employment are major concerns at Christmas. Even the cost of Christmas dinner is climbing, as we revealed last week.

The situation is not helped by the lack of a functioning Executive. At a time of global economic crisis, our politicians are almost unique in their inability to put serious public concerns above their own squabbling.

The Executive couldn’t solve all our problems at this time, but they should be able to deliver what we pay them for: leadership. Because more pitfalls remain.

The Irish government’s decision to underwrite savings in the Republic’s banks presents a serious challenge for Northern Ireland, in that it potentially creates an imbalance with UK-based banks. With such a scent of panic around banking, this is a time for great care.

This newspaper started the Pricewatch campaign because we felt we could help you find a way through the current economic jungle. Some retailers have responded — prices have dropped in many major supermarkets and in corner shops. We’ll keep pushing to keep them as low as possible.

Because we recognise that our economy floats on the pounds that flow through our shops, we want people to spend, as long as they spend responsibly.

Christmas may be tough this year but it need not be an economic disaster.