Consumer confidence hits new lows

Consumer confidence in the UK sunk to a new all-time low in October, according to the Nationwide Consumer Confidence index.

The Expectations Index has also returned its lowest ever reading as consumers continue to be shaken by high unemployment figures, above-target inflation and poor GDP growth expectations.

Confidence fell for the fifth consecutive month to reach 36 while expectations fell by 14 points in October to reach 48. Only 3% described the current economic situation as “good” while 13% expect it to improve over the next six months.

The same index returned a score of 54 during October 2010, as an indication of how much worse consumers feel about the UK’s economic outlook compared to 12 months ago.

Robert Gardner, Nationwide’s chief economist, commented on the significance of the results: “Consumer confidence continued to slide in October, falling by nine points to a new all-time low of 36.

“The index has now fallen for five months in a row, leaving it languishing five points below the previous low of 41 recorded in February this year.”

He adds: “The confidence index, which began in May 2004, is now more than forty points below its long run average of 78.”

The Spending Index was also down by two points in October as consumers adopted a more cautious attitude to purchases.

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