Nationwide Building Society report shows decline in confidence even before riots and market upheaval
UK consumers are putting spending on big ticket items on hold as they grow gloomier about the outlook for the economy and their own finances. A report released by the Nationwide Building Society on Thursday showed that Britons were feeling more pessimistic even before the effects of the riots and the financial turbulence.
In its monthly health check of consumer sentiment, Nationwide found that confidence had slipped back to the levels seen at the start of the year and that there was little prospect of improvement in the rest of 2011.
Robert Gardner, Nationwide’s chief economist, said: “There was a small dip in consumer confidence in July, reflecting increased uncertainty around the outlook for the UK economy. At 49 points, the main confidence index remains well below its long-run average reading of 79.”
Consumers have been hit this year by a combination of tax increases, weak wage growth and higher energy bills. Official figures released in July showed that economic activity expanded by 0.2% in the second quarter of 2011 and was 0.7% up the second quarter of 2010.
“With the economic recovery still facing strong headwinds it is unlikely that we will see any considerable improvement in confidence in the remainder of 2011,” Gardner said.
“Indeed, it may be that we see a further deterioration in August, following riots in a number of UK cities and the sharp declines seen in stock markets around the world. Overall, conditions for the UK economy remain challenging, especially for consumers.”