LONDON (MNI) – UK consumer confidence bounced back in January from
a near record low of 38 in December, but the latest Nationwide survey
shows that consumers are still reserved about making significant
purchases of consumer goods.
The January Nationwide Confidence Index rose to 47 from 38 in
December, which had been only two points off its record low of 36 in
October. This 47 outturn was the highest since the 48 reading last
August but is still depressed by historic standards, with the series’
long run average at 76.
The spending index rose by just one point to 78 in January and the
Expectations Index surged to 64 from 50 in the previous month.
Nationwide put the improvement into context, pointing out that the
headline confidence reading is still 29 points below its long-run
average, and two points lower in than the same month of 2011.
The survey noted persisting reservations among consumers towards
making major purchases and also that respondents still expect house
prices to fall by 0.9% over the next six months.
Commenting on the survey, Robert Gardner, Nationwide’s chief
economist, noted a feeling of ambiguity about the present economic
situation, with economic indicators often pointing in different
directions:
“Given the challenging economic backdrop, with the UK economy
contracting in the final quarter of 2012 and the unemployment rate
rising to its highest level since 1995 in recent months, the improvement
may prove to be little more than a temporary bounce.
“However, a number of other economic indicators have also surprised
and been more positive than expected in recent weeks, which may be an
indication that underlying economic conditions are not as weak as
feared”.
–London newsroom: 4420 7862 7492 email: dthomas@marketnews.com
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