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Monday 31st of August 2009
July 8, 2009    

Nationwide Consumer Confidence Index rises to 9-month high

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by Kay Murchie

People are becoming more positive about the economy after the Nationwide Consumer Confidence Index recorded a rise in June.

The reading increased from 54 in May to 58 in June and reflects the fact that consumers are becoming more upbeat about the future.

According to the Nationwide, the main driver behind the rise in confidence has been in the Expectations Index. Consumers are more confident the economy will be better than today in six months time.

However, the Nationwide said the Present Situation Index continued to decline, as positive sentiment towards the current economy and employment market fell again.

Martin Gahbauer, Nationwide’s chief economist, commented: “During June, consumers’ confidence continued to gradually increase - a trend which has been seen for the last three months.”

However, the current situation is not so good as more than three quarters (76%) of individuals are not so positive and feel the British economy is in bad shape.

Despite the ongoing difficulties in obtaining credit, many people are now more willing to buy big-ticket items such as a house or a car - fuelled by the car scrappage scheme and falls in house prices.

With regard to the housing market, many expect house prices to fall by 0.6% over the next six months - less than the 1.6% fall predicted in May.

In related news, the Halifax today reported that house prices fell by 0.5% in June from the previous month.

The fall takes the annual rate of decline to 15% - down from 16.3% the previous month and means the average UK property now costs £157,715.

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