–GfK/NOP: UK Aug Consumer Confidence -18 Versus -22 July

LONDON (MNI) – UK consumer confidence rose four points to -18 in
August, erasing the falls seen in June and July and marking the first
increase in overall confidence since February, according to GfK/NOP.

Optimism in the personal financial situations index for the next 12
months rose to -3 from -6 in July, but remained three points lower than
in August 2009. The index measuring changes in personal finances during
the last year increased two points to -12, six points higher than a year
ago.

Bank of England Governor Mervyn King, asked about the recent
declines in consumer confidence at the BOE’s August Inflation Report
press conference said “it’s not dramatic yet; it’s clearly noticeable.”

From the BOE’s point of view, what matters is if fragile consumer
confidence impacts real economic activity.

“We’ll have to see how it goes and whether it actually leads
through to softer spending on consumption and investment,” King added at
the press conference, and these latest GfK data should provide some
encouragement as they buck the downtrend in confidence readings.

The GfK/NOP survey found that over the past 12 months there was a
strong improvement in the public’s perception of the general economic
situation, with that index increasing five points on the month to -43;
26 points higher than this time last year.

Expectations for the general economic situation over the next 12
months also increased, rising eleven points to -14, five points lower
than in August 2009.

Despite rising optimism in the economic and financial situation
subsectors, the climate for major purchases index fell four points on
the month to -20; five points higher than a year ago.

The “now is a good time to save” index, fell four points in August,
dropping to -6, which is four points higher than August 2009.

The survey was conducted between July 30 and August 15.

“Overall consumer confidence has been in constant decline for the
past five months,” Nick Moon, Managing Director of GfK NOP Social
Research, said.

“The single biggest movement has been in confidence in the economy
over the next 12 months and this looks particularly encouraging on first
sight,” Moon added.

“However, this gain merely reverses a similarly large drop in July
and in reality confidence in the economy’s future prospects remains
below its June level and similar to May 2009 when we were still in the
grips of a recession,” he said.

–London newsroom 44207 862 7491; email: wwilkes@marketnews.com

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