11/05/2012 00:35:00

UK Consumer Confidence Slumps After Budget

LONDON -- U.K. consumer confidence sank in April as financial expectations and plans to make major purchases fell following the heavily criticized government budget, a survey showed Friday.

And, the index could take a further downward turn in May as consumers take on board news that the U.K. economy has returned to recession.

U.K. high street lender Nationwide's monthly consumer confidence index fell 44 in April from 53 in March. All three sub-sectors declined, but the sharpest drop was in the spending index as consumers are increasingly reluctant to make major purchases and as more respondents expect their household income to be lower in six months time.

"The index has consistently remained well below its long‐run average, signalling ongoing caution on the part of U.K. consumers," said Robert Gardner, Nationwide" s chief economist.

"It is not surprising that confidence remains fragile, with the economy shrinking over the past six months and labour market conditions still weak," Gardner said, adding that while easing inflation buoyed confidence earlier in the year, an increase in fuel and food costs more recently has meant concerns over income have begun to return.

The period over which consumers were questioned directly followed the March 21 government budget report, but came before the U.K. economy was confirmed to have returned to recession. So, while many will have had time to digest the budget which unveiled several unpopular policies -- including cutting the higher rate of tax from 50% to 45% and changes to tax rules for pensioners and warm food -- it is possible the index could fall further in May as confirmation of the weak economy and uncertainty surrounding a speedy recovery take hold.

"Looking forward, there are a number of one‐off factors that are likely to impact confidence in the months ahead. News that the U.K. dipped back into recession at the start of the year may further depress sentiment in the near-term," Gardner said.

U.K. gross domestic product shrank 0.2% on the quarter in the first three months of the year. That followed a 0.3% contraction in the fourth quarter of last year and fulfills a widely held calculation of recession -- two consecutive quarters of economic contraction.

Prospects for recovery remain uncertain as the euro zone -- the U.K.'s largest trading partner -- continues to struggle amid the deepening debt crisis and wide ranging austerity measures.

Other details of the survey showed that the consumers' viewed the present situation as worse than in March, while expectations over job prospects were little changed with 56% of respondents saying there will only be a few jobs around in the coming six months compared with 22% who say there will be more opportunity to find a job.

-By Ilona Billington, Dow Jones Newswires, +44 20 7842 9452; ilona.billington@dowjones.com

(END) Dow Jones Newswires

May 10, 2012 19:35 ET (23:35 GMT)

Copyright (c) 2012 Dow Jones & Company, Inc.

Post comment

Related debate

  • 1 week
  • 1 month
  • 1 Year
28 Jul
FLS
Dine bud på aktien svinger sgu betydeligt mere.......så foreslår vi får skiftet dig ud.
26
26 Jul
VALE
  Måske ikke helt korrekt aktiemarkering, for det handler ikke om Vale specifikt. Jeg finder, som t..
21
28 Jul
VWS
  Hej Debattører på Euroinvestor       Lad det være sagt med det samme. Jeg har lånt nogle Vestas ak..
20
31 Jul
ZEAL
Mange taler om LixiLan og hvor stort det kan blive - inklusiv mig selv!   Men Zealands lidt upræcise..
19
28 Jul
VWS
Hej Maui,   Tak for et nuanceret indlæg, med en meget fin beskrivelse af dine tanker omkring Vestas ..
18
31 Jul
TORM-A
Mit syn på Torm, og hvorfor jeg mener der er penge at hente som investor.    Der er 95,7 mia. Torm-a..
17
31 Jul
 
Kan vi ikke få en service meddelelse på hvad der sker med alle de korrreanske spam indlæg der flyder..
15
29 Jul
OMXC20
Delfin har et indlæg om Varoufakis fra Lars Tvede som 10 personer har tomlet op. Læren er at Varoufa..
15
29 Jul
I:DAX
Alpe påstår ikke som dig at kunne forudsige markedet i detaljer, derimod giver han bud på sandsynlig..
11
28 Jul
 
Jeg håber I holdt fast i går, da banditterne rystede træet i går, og kraknisserne her på EI råbte sæ..
11

Form 8.3 - AXA INVESTMENT MANAGERS S.A.:BG Group Plc

31/07/2015 15:09:34
FORM 8.3 PUBLIC OPENING POSITION DISCLOSURE/DEALING DISCLOSURE BY A PERSON WITH INTERESTS IN RELEVANT SECURITIES REPRESENTING 1% OR MORE ..

Form 8.3 - Quintain Estates and Development PLC

31/07/2015 12:53:21
FORM 8.3   PUBLIC OPENING POSITION DISCLOSURE/DEALING DISCLOSURE BY A PERSON WITH INTERESTS IN RELEVANT SECURITIES REPRESENTING 1% O..

Travis Perkins PLC : Total voting rights

31/07/2015 09:01:25
In conformity with DTR5.6.1R, the Company notifies the market of the following:   As at the date of this announcement, the Company's issued share capital c..

Most read news

  • 24 hours
  • 48 hours
  • 1 week
1
Zodiac Aerospace:Update on the situation following the Explosion at the Newport facility
2
Mueller Industries, Inc. Announces Appointment of Gregory L. Christopher, as Chairman of the Board and the Appointment of Gary S. Gladstein as Lead Independent Director Effective January 1, 2016
3
FIDELITY EUROPEAN VALUES PLC - Half-yearly Report
4
Scott+Scott Files New Class Action Complaint in Foreign Exchange Lawsuit
5
Endurance Announces Completion of Acquisition of Montpelier Re

Buy and sell signals

  • Trend
  • Moneymachine

Copyright Euroinvestor A/S 2015   Disclaimer and Terms of Use
Quote information is delivered by Interactive Data.
Data is delayed 15-20 minutes according to the distribution agreements set by the different exchanges.
 
01 August 2015 14:51:28
(UTC) Dublin, Edinburgh, Lisbon, London
Version: LiveBranchBuild_20150801.1 - EUROWEB6 - 2015-08-01 15:51:28 - 2015-08-01 14:51:28 - 1000 - Website: OKAY