Mintel says that the love affair with expensive handbags such as the Burberry 'Warrior', which can set you back by as much as £13,000, is over, as women become more cynical about celebrity endorsement.
Handbag sales have been a real bright spot in the women's accessories market, with sales rising by 139% between 2002 and 2007, according to Mintel.
This has largely been spurred by glossy magazines like Grazia and Heat obsessing over what designer handbag is being carried by trend-setting celebrities such as Kate Moss, Sienna Miller and Victoria Beckham.
However, it predicts that the trend will be over this year, with a rise of only 18% forecast in handbag sales for 2008.
Handbag retailers need not fear at this point, as the total sales will still reach £553m. However, the higher end of the market may be hit because people will buy more reasonably priced bags from the high street.
Katrin Magnussen, senior fashion analyst at Mintel, said: "Women have become more cynical about celebrity endorsed products.
"Many will no longer be as quick to spend hundreds, even thousands of pounds on a bag just because the likes of Posh Spice have been snapped with one.
"Especially when these days the must-have looks are quickly translated to the high street."
She added that with the success of ethical bags such as the much hyped "I'm not a plastic bag" shopper, designed by Anya Hindmarch, show that the ethical movement is beginning to have an impact on the handbag market, with more bags made from natural and recycled materials.
She said: "Although concerns about cheap labour and environmentally unfriendly practices are only just starting to impact on the accessories market, there is a clear emerging green effect here."
The report found that between 2002 and 2007, hat sales grew by 16%, gloves were up by 9% with scarves and belts growing by 6% and 5% respectively. British women spent a total of £700m on accessories in 2007.