Consumer confidence slips

| August 25, 2011
Consumer confidence slips

Consumer confidence slipped by two points in July, according to Nationwide’s index, returning to a level seen in the post-Christmas gloom of January.

At 49 points, the lender’s main confidence index remains well below its long-run average of 79, and the building society is not expecting a substantial improvement during the remainder of this year.

Over half of those surveyed were shying away from major purchases, alongside a general assumption that UK house prices will fall by 0.4% in the next six months.

The lender’s chief economist, Robert Gardner, comments: “The combination of weak employment growth and wage increases that aren’t enough to keep up with the rising cost of living has acted as a dragging anchor on consumer confidence for some.”

According to Mr Gardner, at this point consumers are likely to be holding back on discretionary household purchases in favour of essential items such as food and energy.

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