Consumer confidence falls in February
The Nationwide Consumer Confidence Index fell to a new low in February, down three points to 78.
Its Bank Base Rate decision forecast reveals that 80% of consumers expect no change in March, while 20% envisage a 0.35% decrease.
The Present Situation Index – how consumers feel about the current economic and employment situation – saw the biggest fall of the four indices, from 83 in January to 76 in February. This was driven by a sharp change in sentiment about current economic conditions.
The proportion of consumers thinking that current economic conditions are bad has increased from a quarter to a third. In contrast, consumers’ feelings about the current job situation remain virtually unchanged on the month.
While there does seem to have been a small upward trend in the proportion thinking that there are fewer jobs available since the autumn, labour market sentiment is still much better than at this time last year.
Martin Gahbauer, Nationwide’s senior economist, said: “The continued downward trend in consumer confidence is to be expected given the effect of higher food and fuel costs on people’s pockets and the tightening of the availability of credit.
“In addition, growing uncertainty about future economic conditions is also likely to have affected consumers’ overall sentiment. Despite this, consumers remain relatively positive about their employment situation both now and in six month’s time. It is perhaps too early for the Base Rate reduction at the beginning of February to have had any effect, but it is unlikely in current conditions that consumer confidence will return to the highs of 2007.”