Consumers cut back spending due to fears for UK economy

CONSUMER worries over job security resurged and retail sales fell in February, fresh data revealed yesterday.

Sale volumes fell 0.8 per cent from January although they rose one per cent compared with February 2011, according to the Office for National Statistics (ONS).

Food sales fell 0.1 per cent month-on-month, while shops sold 1.2 per cent fewer clothes and one per cent less fuel.

February also saw the cautious optimism of the beginning of the year fade, figures from Nationwide showed, with its consumer confidence index falling three points to 44. However, that remains above the all-time low of 38 recorded in December, and well below the long-run average of 76.

“Consumers also scaled back their expectations for the future, with the forward-looking aspects of the index weakening during the month,” said Nationwide’s Robert Gardner.

“Even though interest rates remain at historic lows and the Bank of England opted to inject another £50bn into the financial system, weak labour market conditions and weaker than expected economic growth are continuing to weigh on confidence.”