Consumer confidence remained unchanged in August despite signs the UK is slipping into recession, a report has found.
The Consumer Confidence Index, by Nationwide, showed confidence remained flat during August – the first time confidence has remained static for over a year.
The report suggested consumers may have been buoyed by ‘an easing of petrol prices, reductions in new mortgage rates, and even a little bit of Olympic cheer’.
Views on the economic situation worsened, with 65% of consumers saying it was bad, compared with 61% in July.
Consumers’ views on their employment prospects also deteriorated, with almost a third saying there are ‘not many’ jobs available, and almost half saying there will be ‘few’ jobs available in six months’ time.
The report said consumers are ‘still pessimistic’ about making large purchases, with over two thirds saying now is a bad time to make a major purchase, compared to just half at the same time last year.
Fionnuala Earley, Nationwide’s chief economist, said consumers have accepted the worst may be yet to come.
“Economic uncertainty continues to affect sentiment around spending and employment, but it seems that consumers are beginning to take a realistic view of the future and are factoring in the possibility of tougher times ahead,” she said.
“Lower petrol prices and more competitive new mortgage rates will be good news for the public. Team GB’s Olympic performance in Beijing may even have helped lift the nation’s spirtits slightly this month.”
© Crimson Business Ltd. 2008
