Consumer confidence still falling amid uncertain economic outlook
Published 25/08/2011 | 08:00
Consumer confidence continued to fall last month amid increased concern around the UK's economic outlook and is set to dip further in August, a survey has said.
The riots that rocked England earlier this month could trigger a further deterioration in confidence as the violence hit people's willingness to spend, Nationwide Building Society warned.
Nationwide, the UK's third largest mortgage and savings provider, said its Consumer Confidence Index recorded a reading of 49, well below its average reading of 79 and down on 51 in June.
Nationwide's chief economist Robert Gardner said: "With the economic recovery still facing strong headwinds it is unlikely that we will see any considerable improvement in confidence in the remainder of 2011.
"Indeed, it may be that we see a further deterioration in August, following riots in a number of UK cities and the sharp declines seen in stock markets around the world."
Nationwide said conditions for the UK economy remain challenging, especially for consumers.
Recent survey data provides little evidence of a pick-up in growth in the third quarter, after disappointing data for April to June, the survey said.
The combination of weak employment growth and wage increases that are not enough to keep up with the rising cost of living has acted as a drag on consumer confidence, it added.
Major purchases of big-ticket items are the hardest hit, Nationwide said, and consumers also continue to expect a fall in house prices over the next six months.