Nationwide confidence index gloomy for October

Thursday, 17 November 2011 09:27

The Consumer Confidence Index from Nationwide Building Society has painted a gloomy economic picture of the UK in October.

It released the findings today (November 17th 2011) and said that the crisis in the Eurozone, rising living costs and spiralling unemployment had caused morale to fall to an all-time low.

The index fell by nine points to 36, more than 40 points below the all-time high of 78 and five points lower than February's 41, the previous most disappointing figure.

Only three per cent of the respondents described the current economic situation as "good", while just 13 per cent said they expect conditions to improve over the coming six months.

Consequently, almost half of consumers saw October as a bad time to make a big purchase.

This may continue for some time too, as 19 per cent of those polled believe their household income will be lower in April 2012 than it is now.

Britons were no more confident about house prices either, with the general consensus being that they will fall by 0.6 per cent in the next six months.

Nationwide's chief economist Robert Gardner said concerns over jobs, unemployment and wages, as well as pressure on household budgets, has led to people feeling worried about the economy in the future, dealing a "heavy blow" to sentiment and making them less likely to spend.

"Confidence in the economy is likely to remain shaky until there is some sign of a resolution to the Eurozone crisis and that the UK economy is starting to regain momentum.

"In early October the Bank of England expanded its asset purchase scheme, which should help to stimulate the economy in the months ahead, although it is likely to take some time before the benefits are felt by consumers," he added.

This comes after the Office for National Statistics said this week that youth unemployment had reached the one million mark.

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