Consumer confidence falls

09-01-2008

Consumer confidence falls
Consumer confidence fell for the third consecutive month in December, as fears for the economy coupled with rising prices hit Brits.

The Nationwide Consumer Confidence Index fell one point last month to the lowest level since February 2007.

The fall in confidence came despite the Bank of England cutting interest rates to 5.5 per cent in December.

Fionnuala Earley, Nationwide chief economist, said: "Another weak month for consumer confidence is not surprising given current economic conditions.

"Continued uncertainty about the future path of the economy along with a weakening housing market was bound to affect consumer sentiment.

"Early signs of strong consumer presence at the seasonal sales are encouraging, but the need to persuade shoppers through heavy discounting could itself be seen as a signal of underlying caution."

She went on to say further interest rate cuts expected in the first quarter of 2008 might help to improve matters, but it would be a few months before consumer confidence recovers.

The Nationwide research also reveals Britons expect house prices to fall 0.7 per cent over the next six months – although the fall is less than the 1.2 per cent prediction expected in November.

There is, however, a little cheer in the jobs market - with only 24 per cent of people believing there will be fewer jobs available in six months' time compared with 36 per cent a year ago.

Furthermore 88 per cent of people believe their household income will be the same or higher in six months' time.

However, 42 per cent believe the economic situation will deteriorate in the first half of 2008.

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