High street gloom to continue, consumer confidence at new low: Nationwide

High street gloom to continue, consumer confidence at new low: Nationwide

	Published : Thu, 10 Nov 2005 09:55 By : Cedric Benson Print this Story

LONDON: The high street gloom refused to lift and consumer confidence declined for the third consecutive month in October, causing concerns that the economy could be on a long downturn.

Mortgage provider Nationwide found consumer confidence index sliding 16 percent to 92, over the six months since April when it had peaked. In its survey, Nationwide noted that consumer mood was at its worst in less than a year and a half: 31 percent (the highest since the monthly-index survey started) expected the economy to worsen over the coming months.

Optimism was on the decline – the number of consumers who believed the economy was fine dropped from last year’s 51 percent to 42 percent. Only 14 percent expected conditions to improve over the next few months and 49 percent expected the situation to remain at the current level.

Job prospects were also affected with more consumers expecting fewer vacancies. Only 45 percent believed that there could be plenty of jobs over the next six months.

The only positive aspect to the index was with regard to the housing market, with a large number of people – 41 percent - expecting house prices to rise over the next six months. A spokesperson for the mortgage provider said that conditions in the property market could improve as was suggested by recent surveys that found a growth in the number of house sales as well as in retail sales.

The survey’s house price inflation figures had also pointed to a possible turnaround. Property prices in some areas even showed a decline in the past three months when mortgage approvals also increased. These few signs of recovery are said to be the immediate effects of the 0.25 percent cut in interest rate announced in August.

The Bank of England’s Monetary Policy Committee is scheduled to meet tomorrow but one cannot be sure whether it will be the ‘doves’ or the ‘hawks’ who will dominate the talks on interest rates.

Nationwide interviewed 1,000 people for the survey.