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
16 Jul
TOPO
MÅ JEG ALLER FØRST MINDE OM. da jeg tog på fereie, var der en uvenlig sjæl som ønskede mig såkaldt "..
19
21 Jul
TOPO
Kurshop -  Der findes tusinder af Biotekfirmaer i verden som du kan gå ud og investerer i ! Hvad er ..
16
20 Jul
VELO
Sidder ig gennemlaser tidligere traade og samler her lidt op og vil komme med betragtninger for den ..
13
18 Jul
VWS
Pokerchamp - Du er da gået helt fra koncepterne. Din angreb på meddebatørene er da røget helt ud i h..
12
16 Jul
GEN
Nej problemet med EI er, at der ikke er mange dygtige skribenter (eksperter) tilbage ! Og hvad værre..
12
18 Jul
VWS
sku vi prøve med en afstemning,ang hvem der er mest ude i hampen Alle dem der hellre vil tro på good..
9
16 Jul
VWS
Så er i jo 2, hvis i tager pokerdrengen med så kunne i jo starte jeres eget cirkus fremfor at ødelæg..
9
22 Jul
VWS
Mon dette forum og skribenterne mon nogensinde bliver så voksent, at vi er undgår dette evindelige b..
8
21 Jul
E:VWS
Du kan da umuligt fjerne kernemedarbejdere med 10-30 års erfaring når de ikke engang har haft fabrik..
8
18 Jul
GEN
Skønt - det må være det brede fase Ib studie der afføder disse fase III studier:   http://www.clinic..
8

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
Proven VCT plc : Result of AGM
2
Publicis Groupe: First Half-Year 2014 Results
3
Wolters Kluwer Legal & Regulatory to Acquire LexisNexis Legal Business in Poland and Divest Canadian Legal Assets
4
Proven Growth & Income VCT plc : Result of AGM
5
Stryker Declares a $0.305 Quarterly Dividend
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.
 
23 July 2014 00:22:07
(UTC) Dublin, Edinburgh, Lisbon, London
Version: LiveBranchBuild_20140710.1 - EUROWEB7 - 2014-07-23 01:22:07 - 2014-07-23 00:22:07 - 1000 - Website: OKAY