CONSUMERS should brace themselves for higher prices if the US dollar continues its slide against other major currencies, a business leader warned yesterday.

But Charles Gosling, president of the Chamber of Commerce, said the cloud could have a silver lining in the shape of a boost for tourism.

The dollar has weakened dramatically against the European Union currency, the euro, and against the British pound in recent weeks, as revelations about deliberately misleading financial statements by major corporations have rocked confidence in corporate America, causing stock values to plunge.

As the Bermuda dollar is pegged to the US dollar, the resulting decline in the spending power overseas will be felt here - particularly as the island is heavily dependent on imports.

"The weakening dollar is certainly going to have an effect on goods purchased from outside the US," said Mr. Gosling yesterday.

"In the case of goods from Europe, first cost has gone up by ten or 11 per cent. Not long ago, the euro was valued at 90 cents, now it's about level with the dollar.

"I have not been following the dollar's progress against the yen lately, but if the situation is similar, then the cost of cars coming in from Japan is going to rise."

Yesterday, the dollar tumbled against the yen to its lowest level since late last September.

Mr. Gosling added that consumers would inevitably see price rises of some goods, but probably not those imported from the United States.

"I would hope that the cost of imports from the US will remain fairly flat. Transportation costs have always been priced in the US dollar, so those should remain the same. Even some European goods are priced in US dollars."

If the global economic situation is bad news for shoppers and retailers, it could provide a timely boost for those in the tourist industry however, Mr. Gosling felt.

"We have always got to look for opportunities and the opportunity here could come when Americans see the cost of their European vacation going up by ten per cent, and decide to come here instead," he said.

"Bermuda has always been seen as a costly destination, but at the moment we will appear less expensive - certainly to European visitors."

As imports get more expensive, Bermuda exports will appear cheaper to overseas buyers.

Mr. Gosling's company, Gosling Brothers, is one of the few companies in Bermuda that actually has a significant export business.

"We are now in 48 states of the US and most of the provinces of Canada," Mr. Gosling said. "I'm not sure how those sales will be affected, but certainly it will help exports to Europe."

Yesterday the euro changed hands at 99.25 cents, or up 0.30 percent on the day and up around a cent from overnight lows.

Analysts said that gloomy dollar sentiment remained firmly intact, with Wall Street stock weakness and the recent stream of corporate accounting scandals cooling investors' enthusiasm for US assets.