Looming election 'hits consumer confidence'
By myfinances.co.uk staff
Consumer confidence suffered a sharp downturn in March as the prospects of a tightly-run general election on May 6th clouded people's outlook for their personal income and the wider economy.
Nationwide's Consumer Confidence Index dropped by nine points during the month to 72. This is the biggest monthly fall since July 2008 and wipes out all gains made so far this year.
The measure of confidence in the current state of the economy declined by four points, while the sub-index tracking expectations of the outlook for household income, employment and the economy in six months' time slid by 11 points from February's record high score of 116 points.
However, following three straight months of contraction, the spending index rose in March to 96 points, taking it back to the level seen at the same point last year.
Martin Gahbauer, Nationwide's chief economist, said that with the election on the horizon, worries about the economy will becoming more prominent in people's minds and many will feel "unsure as to whether they will be better or worse off in the coming months".
He added that while a drop in consumer confidence was recorded in the run-up to the 2005 general election, the pessimism "seems to be stronger this time around".
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