Consumer confidence plunges

 
City A.M. Reporter
Consumer morale plunged in November to its lowest since the UK was in the depths of recession, as the announcement of government spending cuts raised fears over the future, a survey showed.

The Nationwide Consumer Confidence index fell 7 points to 45 in November, its fourth consecutive fall and the lowest since March 2009.

The poll was conducted in the four weeks after the government's Comprehensive Spending Review, which spelled out details of the deepest spending cuts since World War Two. The cuts are expected to cost hundreds of thousands of public sector jobs.

The index gauging people's expectations for the next six months fell to 61 in November from 70 in October, also the lowest since March 2009.

The spending index fell 13 points on the month to 79, the lowest since November 2008.

"The Spending Review may well have been a contributing factor to this shift, as consumers digested the impact of this on their own situations," said Nationwide chief economist Martin Gahbauer.

"However, with average earnings growth not keeping up with inflation, consumers may be finding that their purchasing power has been eroded."