Mark Salmond said everyone was feeling the pinch after the cost of fuel rose by more than 20% since the start of the year, forcing the prices of food, energy and other products to rise as a result.

With wages remaining at the same rate they were at the start of the year, there are growing fears that a recession may be round the corner.

But the Angus corporate services convener said Montrosians could take the pressure off their own purse-strings by choosing to shop within the town, in turn supporting local businesses who are also suffering from the effects of the global economic downturn.

He said: "It's now getting to the stage where more and more people are thinking, can we justify going out of town for shopping? Do we need to go to Dundee, Aberdeen etcetera?

"Running costs for everything are going up and we have to economise - everyone is feeling the pinch.

"People are now thinking, can I get it locally? I think we can. It may be a few pennies more expensive than the city, but then you don't have the cost of fuel.

"One positive we can take from the price of fuel is that Montrose has a vibrant town centre - one of the best in Angus. There is a great diversity of businesses in the High Street and the town has everything.

"But it is important that the local population supports the businesses that are here, because if we don't, we won't have them."

Meanwhile, the credit crunch has already taken its toll on one local business, The Mortgage and Property Shop Ltd, who are relocating in an effort to cut costs.

The financial services company, currently trading at 198 High Street, will relocate to premises in Arbroath next week as they aim to stay competitive in an increasingly difficult market.

The company, formed nearly three years ago, is also set to close its estate agency arm, with the stagnant property market to blame.

Director Andy Boyd said: "We're moving premises because of the market conditions. We've sent letters to our customers and contact details if anyone wants to speak to one of our advisers.

"Sometimes you've got to make tough decisions to survive and that's what we've done."