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
18 Oct
OMXC20
Data herunder er lavet på C20 Cap og C20 vægtet til at passe til C20 Cap i 2010 og 2011.   Siden den..
66
16 Oct
 
Jeg skriver lige det her indlæg fordi det er 5. gang som investor jeg oplever en af de her lidt stør..
56
16 Oct
 
Kære Alle   Jeg takker Jer alle for en god tid her, jeg erkender at have tabt, selvom jeg holdt mig ..
36
17 Oct
VWS
Normal 0 21 false false false DA X-NONE X-NONE ..
28
17 Oct
I:SP500
  Hvorfor aktiemarkedet ikke er blevet for dyrt   I mit indlæg vedr. aktie- og vækstkrise beskrev je..
21
16 Oct
I:SP500
  @bgadk – enig i, at en moderat inflationær politik der holder deflations-spøgelset nede, er præcis..
20
20 Oct
VELO
Tvivler på at du får ret. Aktieanalytikerne siger allerede før godkendelsen en KORTSIGTET kurs på 2..
17
15 Oct
VWS
Hej   Jeg kan umuligt være det eneste menneske der er sygt træt af at, bankerne (Gold/Morgan), voldt..
17
16 Oct
OMXC20
Med reference til mit indlæg af 10.07.2014 emne nummer 280903   Dengang i juli var der uro på marked..
16
20 Oct
VELO
Match, så har jeg set lidt på mine handler og depoter.   Må begynde med at konkludere, at mit handel..
15

Tech Companies Send Criticism Along With NSA-Related Data -- Update

04/02/2014 00:06:00
By Danny Yadron Technology companies including Google Inc. and Microsoft Corp. released new figures on the amount of data requests they received from U.S. ..

U.S. Hot Stocks: Hot Stocks to Watch

03/02/2014 14:07:00
Among the companies with shares expected to actively trade in Monday's session is Herbalife Ltd. (HLF). Herbalife Ltd. (HLF) raised its fourth-quarter outl..

Pfizer Study Meets Primary Endpoints

03/02/2014 13:05:00
Pfizer Inc. (PFE) said Monday that a Phase 2 trial of its advanced breast cancer treatment met its primary endpoint. Pfizer said a study comparing the effec..

Most read news

  • 24 hours
  • 48 hours
  • 1 week
1
Medtronic Launches the Divergence(TM) Anterior Cervical Fusion System
2
Orion Group Interim Report January-September 2014
3
Wayside Technology Group, Inc. to Announce Third Quarter 2014 Results on October 30, 2014
4
Proven Growth & Income VCT plc : Half-yearly report
5
Materialise Acquires OrthoView, the Market Leader in Orthopedic Digital Pre-operative Planning Software
Euroinvestor around the globe: Euroinvestor.dk | Euroinvestor.se | Euroinvestor.no | Euroinvestor.fr | Forexinvestor.com| Wisselkoersen.nl | Valuta.se | Valutaveksel.no | Divisas.es | Valute.it
Copyright Euroinvestor A/S 2014   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.
 
22 October 2014 05:46:50
(UTC) Dublin, Edinburgh, Lisbon, London
Version: LiveBranchBuild_20141015.1 - EUROWEB6 - 2014-10-22 06:46:50 - 2014-10-22 05:46:50 - 1000 - Website: OKAY