Nationwide finds consumers lacking in confidence

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Nationwide finds consumers lacking in confidence

Wed 5th Mar 2008

Nationwide released its latest Consumer Confidence Index today, which fell three points in February to hit a new low.

The Present Situation Index, which measures how consumers feel about the current economic and employment situation, had the most precipitous drop of the four indices, from 83 in January to 76 in February.

This was mainly driven by consumers' negative feelings about the current economic situation, as labour market sentiment is actually much better than at this time last year.

As far as people's feelings about their economic and employment future go, the Expectations Index remained at the same level as it was in January.

However the index is down on this time last year, from 85 to 79, which is "not surprising" considering the current uncertainty over the future of the economy, Nationwide suggests.

The Spending Index fell four points to 64 last month, with just 11 per cent of consumers confident that now is a good time to make a purchase.

Again, with rising food and fuel prices and a slowing housing market, this is not altogether unexpected.

Martin Gahbauer, Nationwide's senior economist, said: "Growing uncertainty about future economic conditions is likely to have affected consumers' overall sentiment. Despite this, consumers remain relatively positive about their employment situation both now and in six months time."

"It is unlikely in current conditions that consumer confidence will return to the highs of 2007," he added.

Recently, national money education charity Credit Action said that Brits are finding it increasingly difficult to manage their finances and warned "as inflation kicks in, people find that more of their take-home salary is taken up paying for day-to-day expenses".

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