Nationwide: Consumer confidence 'on the rise'

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Nationwide: Consumer confidence 'on the rise'

Thu 10th May 2007

Increases in consumer confidence indicate that Britons have managed to adjust to a number of recent interest rate rises, Nationwide has commented.

Nationwide chief economist Fionnuala Earley's comments follow the release of an index by the group which indicates that consumer confidence has risen to its highest level since October 2006.

With the group's expectation index increasing by two points, representing the fourth consecutive monthly rise, Britons have shown themselves to be less negative about prospective economic and employment conditions.

Consumer spending has also been shown to be more buoyant in the Nationwide index, but confidence is a good deal lower than the same time a year ago.

Despite Ms Earley suggesting that consumers had come to terms with the interest rate rises of recent times, she said that inflationary pressures made it likely that the Bank of England's monetary policy committee would increase the base rate further.

"The extent to which this hits consumers confidence will to some extent depend on the impact of falling utility prices this summer against higher debt repayments," she added.

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