Confidence declines in September

Wednesday, 08 October 2008 09:01

Consumer confidence fell again in September after two months of stability as turmoil in the financial system hurt sentiment.

The Nationwide consumer confidence index fell three points to 50 in September, after remaining unchanged in August and July.

Two thirds (66 per cent) of those questioned believe the current economic situation is bad, one per cent more than in August.

However, optimism about the future appeared to increase from last month, perhaps as people thought things could not get any worse.

A total of 44 per cent of consumers believe the economic situation will be the same or better in six months time, increasing from 39 per cent the previous month.

Fionnuala Earley, Nationwide's chief economist said: "Consumers have been adjusting the way they feel about the current economic and employment situation since July and this continues to be the main driver behind the drop in overall confidence in September.

"While consumers recognise that there are some good deals available, rising unemployment, falling house prices and the continued turmoil in the financial markets are likely to mean that confidence will take some time to recover."

The majority of consumers believe the next move for the base rate will be downwards, with 60 per cent expecting a 0.25 per cent cut and 30 per cent predicting a 0.5 per cent cut.

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