VAT hike and inflation see consumer morale tumble

Julian Harris
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CONSUMER confidence fell to just six points above its all time low, according to a Nationwide index released today.

After rising to 54 in December, the index dropped to 47 last month, weighed down by a collapse in spending confidence that was mainly caused by the VAT rise and inflation, Nationwide said.

The survey’s spending index plummeted by 20 points, to its lowest level (70) since November 2008.

Meanwhile the expectations index, which measures confidence over the next six months, dropped by 10 points.

“Less than one in five consumers believe things will improve over the next six months,” said Nationwide’s chief economist Robert Gardner.