UK Nationwide Consumer Confidence Survey drops in January.

February 6, 2008 - Forex Economic News

UK consumer confidence declined in January according to a monthly survey released by Nationwide today. The survey results showed that the Nationwide Consumer Confidence Index dropped to its lowest level since the beginning of the survey in 1967. January's confidence index fell 4 points to 81 after posting an 85 score in December and January marked the fourth straight month of decline.

The survey results showed that UK consumers felt worse in January about the economy and employment as the Present Situation Index dropped to 83 from 88 in December. The future outlook of the UK consumer also declined as the Expectations Index fell in January to 79 from 83 in December. Future house price expectations declined as consumers expect house prices to decline 0.2 percent in the next six months compared to December's expected house price increase of 0.7 percent. Future employment confidence dropped to 36 percent in January down from 44 percent in December.

Nationwide’s senior economist Martin Gahbauer commented on the Index readings in the report, “The continued downward trend in consumer confidence in January is not unexpected in light of current uncertainties about the economic outlook. Sharp falls in share prices, the rising cost of essential items and a weak exchange rate have combined to negatively impact consumer sentiment, which could be a reason for the increased pessimism around the future economic and employment situation."

Household spending held steady in January despite the gloomy report as the Spending Index was unmoved from December at 68. Survey results showed that 44 percent of those surveyed in January said it was a good time to buy household goods up from 35 percent who said it was a good time to buy household goods in December. Read the full report here(pdf).

Upcoming: The Bank of England is on tap to announce its interest rate decision on Thursday at 12 Gmt with the market expecting a cut of 25 basis points from its current position at 5.50%.

Tags: Nationwide Index, UK Consumer Confidence, Spending Index

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