Fionnuala Earley, Chief Economist For Nationwide, Said: "Another Weak Month For Consumer Confidence Is Not Surprising Given Current Economic Conditions

Category: Finance, Personal Finance.

The country s financial outlook has continued to worsen, new studies show.

In addition, it was stated that the impact of increased petrol and food prices are continuing to have an impact on consumers views in regards to finances. In Nationwide s most recent consumer confidence index, Britons financial optimism dropped by one point over the course of December to stand at 85- the lowest score noted since February 200Despite the decision by the Bank of England s monetary policy committee( MPC) to lower the base rate of interest earlier on in the month, the financial services firm claimed that many people are uncertain about the economy. The present situation index, which follows people s feelings about the current economic and employment climate, the index judging, dropped to 8Meanwhile Britons expectations about the economic and working situation, as well as their own income, remained steady at 8 Meanwhile, which monitors consumers, the spending index enthusiasm with regard to spending money, rose by a" respectable" five points over the course of December to stand at 6However, Nationwide pointed out that even this figure is" well below" the average of 82 recorded at this time of year. In addition, the number of those who believe that now is an ideal moment to make a major purchase, which may include something that could be funded through a loan such as a house or car, have fallen. It was claimed that this could partially be due to people waiting for the January sales to begin, although it was indicated that there has been a general" shift in sentiment" . An estimated 58 per cent think that now is a bad time for such buying, an increase from the 48 per cent noted 12 months ago. This may also incorporate meeting various demands on their spending such as personal loans, credit cards and, grocery costs mortgages.

Following shortfalls across a variety of areas, it seems that numerous consumers are worried about various areas in relation to their finances, which could include their capacity to save money for the future. Fionnuala Earley, chief economist for Nationwide, said: "Another weak month for consumer confidence is not surprising given current economic conditions. Further rate cuts expected in the first quarter of 2008 may help to improve matters, but it is likely to be a few months before consumer confidence recovers to levels seen earlier[ in 2007] ." Research from the financial services firm also showed that Britons now believe property prices will by 7 per cent during the next six months, in comparison to the 2 per cent growth which was predicted in November. Continued uncertainty about the future path of the economy along with a weakening housing market was bound to affect consumer sentiment. "Early signs of strong consumer presence at the seasonal sales is encouraging, but the need to persuade shoppers through heavy discounting could itself be seen as a signal of underlying caution. With an apparent dour outlook to finances, people concerned about managing their money over the coming months may wish to consider a cheap loan to help supplement spending. A recent study by Cater Allen Private Bank indicated that some 30 per cent of Britons are keeping a monetary secret from a loved one. However, those thinking about getting a loan may wish to be honest to their partner about their borrowing intentions.

Managing director Richard Dunn claimed that" modern Britons are not comfortable with being upfront about their financial affairs" .

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