7th August 2008
Consumer confidence in the economy plunged by record levels in July, according to the latest monthly survey by Nationwide.
The building society's Consumer Confidence Index fell by 11 points to 51, down 18% from June, and 46% lower than July 2007. The figures represent the proportion of respondents giving positive answers to five economic and financial questions.
The falls are the largest ever recorded in the index. Nationwide suggests that they may reflect consumer concerns at falls in house prices, news of job losses and likely increases in the cost of living.
The survey includes a 'present situation' sub-index, which measures views about the current state of the economy and employment. This fell 18% from June, while the expectations index - which looks ahead at the next six months - fell by 15%.
The spending index, which reflects confidence about spending on major purchases and household goods, fell by 11%.
Nationwide chief economist Fionnuala Earley said: "The continuing downward trend in consumer confidence is not surprising given the recent batch of poor economic data.
"Talk of the increasing chances of a recession, more weakening in the housing market and the continuing rise of food and energy costs will have further dented confidence, as will reports of job losses."
Meanwhile, the Bank of England announced today that the Bank interest rate will remain unchanged at 5.0%. Its next decision is due on 4 September.
Consumer confidence plummets
The building society's Consumer Confidence Index fell by 11 points to 51, down 18% from June, and 46% lower than July 2007. The figures represent the proportion of respondents giving positive answers to five economic and financial questions.
The falls are the largest ever recorded in the index. Nationwide suggests that they may reflect consumer concerns at falls in house prices, news of job losses and likely increases in the cost of living.
The survey includes a 'present situation' sub-index, which measures views about the current state of the economy and employment. This fell 18% from June, while the expectations index - which looks ahead at the next six months - fell by 15%.
The spending index, which reflects confidence about spending on major purchases and household goods, fell by 11%.
Nationwide chief economist Fionnuala Earley said: "The continuing downward trend in consumer confidence is not surprising given the recent batch of poor economic data.
"Talk of the increasing chances of a recession, more weakening in the housing market and the continuing rise of food and energy costs will have further dented confidence, as will reports of job losses."
Meanwhile, the Bank of England announced today that the Bank interest rate will remain unchanged at 5.0%. Its next decision is due on 4 September.
Tags: Retail & Shop
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