–UK Nationwide Feb Consumer Confidence 38 Vs 48 In Jan
–UK Nationwide Feb Spending Index 52 vs 70 in Jan

LONDON (MNI) – The Nationwide UK consumer confidence index slumped
from 48 in January to 38 in February, hitting its lowest level since the
series began in May 2004.

Nationwide said the fall was again driven by a sharp deterioration
in the Expectations Index, with the gauge that shows consumers’
assessment of the economic and employment situation in six months’ time
falling to 50 from 64 in January.

Growing pessimism towards spending forced the Spending Index down
to 52 points in February from 70 in January – also a record low.

Consumers were downbeat about the economy. In all, 75% said the
current economic situation was bad with 69% saying not many jobs were
available.

Looking six months ahead there was little improvement, with 63%
saying not many jobs would be available and 42% saying the economy would
be bad and 42% saying it would be neither good nor bad and just 14%
saying it would be good.

Academic research, including work from the National Institute of
Economic and Social Research, has found no close fit between confidence
surveys and consumer behaviour. Declining consumer confidence, however,
will add to fears the UK economic recovery is, at best, going through a
soft patch.

The Nationwide survey suggests consumers’ confidence is being hit
by talk of the imminent fiscal tightening and persistently high
inflation.

“There are many factors that may be holding back confidence at the
moment. The labour market remains fragile, with the unemployment rate
still high and wage growth weak. Inflation is showing few signs of
easing, and high fuel prices and the VAT increase have further eroded
disposable incomes in recent months,” Robert Gardner, Nationwide’s
chief economist, said.

“More generally, the UK recovery remains sluggish and there was
little positive news in February to give consumers a much needed boost.
Furthermore, news that the economy shrank in the final quarter of 2010
will have done nothing to lift already dampened spirits,” he added.

–London newsroom: 4420 7862 7492 email: wwilkes@marketnews.com

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