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Consumer confidence down but signs of stability emerge

Published: 19 May 2011
While confidence is still hovering slightly above recession levels, a modest two point decline in April suggests some stability.
The Nationwide's Consumer Confidence Index fell by two points to 43 in April, showing the British public are still cautious about their situation and conditions over coming months.

While the figure is still only four points above the Index's record low in February 2011, and barely hovering above the levels of confidence seen during the recession, the small change does suggest some stability, even if at a depressed level, says Nationwide.

Fears of a double-dip recession have also been dispelled, with recent figures revealing that the UK returned to growth in the first quarter of this year. However, this has done little to boost confidence among the country's consumers.

Weak growth and higher inflation, which is now roughly double earnings growth, continues to put pressure on households and means shoppers lack the spending power to help drive the economy forward, says Nationwide. In fact, the Spending Index saw the biggest fall in April, down five points. This decline was mainly driven by lower confidence towards major purchases, although sentiment towards future household income as w hole remains at a relatively low level, according to Nationwide's findings.

Nationwide chief economist Robert Gardner said: "Clearly consumers are still feeling downbeat about the current situation and there is little to suggest that they expect things to improve much over the coming months. However, the data does suggest a degree of stability, with only small movements seen across the various measures in April."

He added: "The past 12 months have seen confidence progressively fall back towards the lows recorded during the recession. It now seems fairly safe to say that they tick up we saw in March was not the beginning of any sustained resurgence in confidence. It may be some time yet before we begin to see this emerge."


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