–GfK/NOP: UK Consumer Confidence Falls To -20 vs -18 Prior

LONDON (MNI) – UK consumer confidence fell back slightly in
September, returning to its declining trend, having risen from the July
low in August, according to GfK/NOP.

The index fell to -20 in September from -18 in August, still below
the -22 in July, which was the lowest reading since the -25 recorded in
August last year. The long run average in the series is -8, and the data
highlight widespread pessimism among consumers.

Optimism in the personal financial situations index for the next 12
months dropped to -5 from -3 in August, and stands four points lower
than in September 2009. The index measuring changes in personal finances
during the last year slipped two points to -14, one point lower than a
year ago.

The GfK/NOP survey found that over the past 12 months there was a
slight deterioration in the public’s perception of the general economic
situation, with that index dropping three points on the month to -46; 17
points higher than this time last year.

Expectations for the general economic situation over the next 12
months also fell, dropping five points to -19, twenty-five points lower
than in September 2009.

Despite falling optimism in the economic and financial situation
subsectors, the climate for Major Purchases index actually rose five
points on the month to -15; the same level as a year ago.

The “now is a good time to save” index decreased three points to
-9, four points lower than September 2009.

The survey was conducted between September 3 and September 12.

“September’s slump suggests the rise in consumer confidence in
August was a false dawn, as feared. Besides the trough in July, probably
caused by the emergency budget, this month’s figure is the lowest
confidence has been for the past year,” said Nick Moon, Managing
Director of GfK NOP Social Research.

The fluctuations in consumer confidence surveys will tend to be
peripheral in the monetary policy debate, with Bank of England Monetary
Policy Committee newcomer Martin Weale openly skeptical about them.

Weale once co-authored a research paper at the National Institute
of Economic and Social Research which, in his words, “came to the
conclusion that consumer confidence estimates in the United Kingdom have
little predictive power and that it is probably a mistake for the Bank
of England to set interest rates with reference to them.”

–London newsroom 44207 862 7491; email: wwilkes@marketnews.com

[TOPICS: MT$$$$,M$B$$$,MABDS$]