Consumer confidence hits all-time low
Rising unemployment, weak economic growth and squeezed household budgets have pushed consumer confidence closer to its all time low, according to a new survey published today.
Four successive monthly falls have left the Nationwide's Consumer Confidence Index just four points above February's record low, with 80% believing there will be no improvement over the next six months.
However, the Nationwide Spending Index, which fell back slightly in September, has been more resilient in recent months with a quarter of consumers believing now is a good time for a major purchase.
The downbeat survey underlined pressures faced by families, which are struggling with three-year high inflation, slow wage growth and 17-year high unemployment.
Robert Gardner, Nationwide's chief economist, said: "The economy has hardly grown in 2011 and pressure has continued to mount on household budgets."
Nationwide said demand in the UK's main export markets - the eurozone and North America - was likely to remain sluggish and weigh on the country's recovery.
Mr Gardner said "recent signs of concerted action" by policymakers and politicians could bolster sentiment in the months ahead.
The Bank of England pumped £75 billion into the economy at the start of October and kept interest rates on hold at just 0.5%, while Chancellor George Osborne said the Treasury was exploring the possibility of "credit easing".
Mr Gardner said: "This could translate into increased consumer confidence if people believe these efforts will be successful in lifting the economy out of its current malaise."
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Households' assessment of the current economic situation dipped again in September, with a greater proportion of people judging it to be "bad". Nationwide said.
Meanwhile, just 15% of people believe there will be an improvement in the economy over the next six months, Nationwide added.
Earlier this week, Bank of England governor Sir Mervyn King told families they should expect some respite from the high cost of living next year.
However, inflation will be pulled down by a sluggish recovery, as the Bank expects growth in the UK to fall "close to zero" by the end of the year.
