Consumer morale at new low

Julian Harris
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CONSUMER confidence plummeted to an all-time low in February, according to a Nationwide survey released today.

The survey’s headline measure of morale on the high street collapsed by 10 points, as households continue to feel the squeeze.

The headline index dropped to a score of 38, from 48 in January. At the same time last year it was significantly higher, measuring 82 points.

“Consumer confidence has now reached its lowest level in the survey’s history, superseding the previous low seen during the recession,” said Nationwide economist Robert Gardner.

“A fall in expectations towards the future was the main factor driving the index down,” Gardner said.

The expectations section of the index – which gauges respondents’ economic expectations six months from now -- flopped to 50 points, from 64 the month before.

Yet even the present situation index fell to its lowest level for 18 months, while the spending index hit its lowest level since the survey began in 2004.

The spending index fell by 18 points in February, to a score of 52.

The proportion of consumers who believe now is a good time to buy household goods is just over a fifth (21 per cent), dropping by 14 per cent on the previous month. Meanwhile, the proportion feeling now is a good time for purchases fell three per cent.

“Inflation is showing few signs of easing, and high fuel prices and the VAT increase have further eroded disposable incomes in recent months,” Gardner added.