UK consumer confidence falls further

Wednesday 9th July 2008

Most Brits now fear the economy will worsen as consumer confidence falls further.

The Nationwide Consumer Confidence Index dropped to 61 points in June – down four points since May and falling from 99 points in September last year - with greatest shifts coming from fears over the economy.

Some 53 per cent thought the economic situation would deteriorate in the coming six months - a rise of 24 percentage points.

Just 14 per cent thought the economy would improve – compared to 48 per cent a year ago.

Only 16 per cent thought their household income would rise – a fall of five percentage points since May.

However, the number of consumers who thought it was a good time to make a major purchase, rose to the highest level since July last year.

Nationwide chief economist Fionnuala Earley said: “This month’s drop in confidence is to be expected given the recent run of bad news.

"With reports of rising inflation rates, weaker economic growth and further falls in house prices, it is not surprising that people are feeling much less optimistic about the future."

However, the data did show some optimism over the jobs market.

Thirty-seven per cent of people polled said there would be more jobs available in the next half of the year – up on the last two months.

Ms Earley said: "While consumers appear to be fairly relaxed about the availability of jobs, with unemployment beginning to rise, we are likely to see a change in labour market sentiment over the coming months.”

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