(RTTNews) – Consumer confidence in the United Kingdom held firm in November led by greater optimism about the future economic situation, the results of a survey showed on Wednesday.
The Nationwide Building Society announced that the consumer confidence index stood at 73 in November, unchanged from the upwardly revised reading for October. The expectations index rose to 108 from 107 and this was offset by a decline in the present situation index by 2 points to 20. The index measuring spending intentions rose to 106 from 104.
The proportion of persons expecting the economy to be worse off in the next six months eased to 14% in November, the lowest level on record. But consumer morale regarding the current situation worsened slightly, with the proportion of people thinking the economy is currently in a bad shape rising to 70%, while 67% thought there were currently few jobs available.
“Consumer confidence remained stable for a second consecutive month in November, suggesting that consumer sentiment is holding steady at the end of a volatile year for the index,” said Martin Gahbauer, Chief Economist at Nationwide.
“In the last few months, consumer confidence has lost some of the upward momentum evident earlier in the year and this is largely due to ongoing pessimism about the current economic situation rather than expectations for the future.”
“The downbeat assessment of the present situation is consistent with recent news that the UK has been slower to come out of recession than other countries,” Gahbauer stated.
In other news, the Office for National Statistics reported on Tuesday that the UK’s manufacturing output unexpectedly stagnated in October, further underlining the fragile state of the economy.
Manufacturing output remained flat on a monthly basis in October, while economists were looking for an increase of 0.4%. In September, production had slumped 1.5%, revised up from the 1.7% fall estimated earlier.
Earlier this week, the British Chambers of Commerce downwardly revised its GDP expectations for 2009 and 2010. The business group now forecasts a 4.6% decline in GDP in 2009, more severe than the 4.3% fall predicted in September. The growth outlook for 2010 was lowered to 1% from an earlier forecast of 1.1%.
Meanwhile, policy makers at the Bank of England are scheduled to hold their December Monetary Policy Committee meeting later this week and are expected to continue their GBP 200 billion asset purchase scheme, while the benchmark interest rate is widely forecast to be held at a record low of 0.50%.
Later today, UK Chancellor Alistair Darling is expected to impose a tax on the bonuses paid by banks and possibly announce areas of public spending that might see reductions in his pre-budget statement.