Consumer confidence at six-month high
Wednesday, 09 May 2007 16:57
Consumer confidence increased for the fourth consecutive month in April says Nationwide
Britons' optimism in the UK economy reached a six-month high last month, new research has revealed.
The consumer confidence index published today by Nationwide rose for a fourth consecutive month in April, up two points to 90, its highest level since October 2006.
Nationwide said the rise indicated that consumers had "come to terms" with recent interest rate rises and that fewer people felt negative about the country's future economic and employment prospects.
The building society also revealed that consumer sentiment about spending increased six points last month, although it stressed that the current level was still 18 points lower than a year ago.
Meanwhile Nationwide chief economist Fionnuala Earley warned that with inflation still more than one per cent above the Bank of England's target rate, the monetary policy committee (MPC) was likely to increase rates again this week, with the impact on consumer confidence currently uncertain.
"The extent to which this hits consumers confidence will to some extent depend on the impact of falling utility prices this summer against higher debt repayments," she said.
Nationwide's figures reflect a similar index published at the end of last month, with GfK NOP's consumer confidence barometer also rising to its highest level in six months during April.
Nonetheless, tomorrow's interest rate decision by the Bank of England is likely to be the focus of much attention, with the British Retail Consortium (BRC) insisting today that consumer confidence remained weak last month.
The trade body, which has said that interest rate rises have cast a shadow on the high street, said that retail sales were up 2.4 per cent in April on a like-for-like basis compared to a 6.8 per cent rise in the same period in 2006, largely due to Easter falling late last year.