Confidence falls as consumers hope for increased savings

Wednesday, January 11, 2006

Consumer confidence is falling, reversing the trend for the previous month, according to the latest research by Nationwide building society.

Following a nine point rise in November, the Nationwide Consumer Confidence Index experienced a five point fall in December.

Despite falls in the Present Situation Index, Expectations Index and Spending Index combined with the Consumer Confidence Index fall, Nationwide is suggesting that consumer confidence is levelling out and may well pick up soon.

"The gloomy view among consumers is perhaps not surprising given that over the last 12 months GDP has almost halved, it also suggests that as we approached the year end people may have re-appraised their situation and become more realistic about the future," said Nationwide's executive director, Stuart Bernau.

"However, with the speculation of a fall in interest rates and recent figures showing that the appetite for new debt has fallen to its lowest level for 11 years we may begin to see a slight shift in consumers' attitudes."

Nationwide's figures showed that in the run-up to Christmas, people's confidence in the present economic situation reached an all time low.

The statistics also revealed that 80 per cent of people think that their financial state will improve in 2006, suggesting greater investment and an increase in savings.

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