Economic uncertainty hampering confidence
The Nationwide consumer confidence index fell four points to 61 in June, proof that the ongoing economic uncertainty is continuing to negatively impact on consumer confidence.
A weakening housing market and the higher cost of food and fuel are just two of the factors affecting consumer sentiment.
The present situation index, which measures views about the current economic and employment situation, and the spending index, which reflects consumer sentiment about spending on household goods and major purchases, remained static in June at 56 and 60 respectively. However, both indices stayed at their lowest level to date.
Fionnuala Earley, Nationwide’s chief economist, said: “This month’s drop in confidence is to be expected given the recent run of bad news. With reports of rising inflation rates, weaker economic growth and further falls in house prices, it is not surprising that people are feeling much less optimistic about the future.
“While consumers appear to be fairly relaxed about the availability of jobs, with unemployment beginning to rise, we are likely to see a change in labour market sentiment over the coming months.”
There has been very little change to consumers’ views about the current situation, after last month’s sharp fall in comparison to the previous year. However, consumers have become far less upbeat about the future of the economy. More than half believe the economic situation will be worse in six months’ time – the highest number this year and 24% more than this time last year.