Consumer confidence heads south

Posted 2008-04-8

The latest Nationwide consumer confidence index has shown Brits are growing increasingly uneasy about the state of the economy.

According to the figures released for March, consumer confidence has now reached its lowest level since the building society started keeping records some four years ago.

Only 14 per cent of Brits expect the economy will improve over the coming six months, with a majority (62 per cent) saying future employment levels are not positive.

"The downturn in consumer confidence over the last six months is not surprising given developments in the financial markets and a weakening housing market," commented nationwide chief economist Fionnuala Earley.

"The effect of recent interest rate cuts has yet to trickle through to peoples pockets, particularly as food and energy costs are still high.

"Consumers may begin to feel more comfortable following the expected cut to rates this week, but it is unlikely that confidence levels will increase in the short term."

Further adding to the gloom, Halifax yesterday revealed that house prices have begun falling at their fastest rate in 16 years.

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