Bloomberg News

U.K. Consumer Confidence Fell in September for Fourth Month

October 21, 2011

(Updates with pound in sixth paragraph.)

Oct. 21 (Bloomberg) -- U.K. consumer confidence fell for a fourth month in September as unemployment increases and accelerating inflation squeezes Britons, Nationwide Building Society said.

An index of sentiment slipped 3 points from the previous month to 45, the lowest since April, the Swindon, England-based customer-owned lender said in an e-mailed report today. A gauge of consumers’ expectations slipped to 62 from 65.

The Bank of England, which restarted asset purchases this month to aid the recovery, said this week that economic growth may stall in the current quarter. The economy grew just 0.1 percent in the second quarter, while unemployment rose to the highest in 15 years in the three months through August.

“These relatively downbeat findings are understandable given the challenging economic backdrop,” Robert Gardner, chief economist at Nationwide, said in the report. The central bank’s new stimulus “could translate into increased consumer confidence if people believe these efforts will be successful in lifting the economy out of its current malaise.”

A gauge of Britons’ assessment of their present situation fell 2 points to 21, Nationwide said. An index of shoppers’ views on whether it’s a good time to make a major purchase, such as a house or car, fell 2 points to 77.

The pound rose 0.1 percent against the dollar and traded at $1.5805 at 10:40 a.m. in London. Government bonds declined, pushing the yield on the 10-year gilt up 5 basis points to 2.51 percent.

Unemployment Rises

Britain’s unemployment rate rose to 8.1 percent in the three months through August as the government affirmed its commitment to the biggest budget squeeze since World War II. Data this week showed inflation accelerated to 5.2 percent last month, matching the highest reading on record.

Minutes of the central bank’s Oct. 6 policy decision published this week showed all nine members of the Monetary Policy committee voted to raise asset purchases to 275 billion pounds ($433 billion). They also left the benchmark interest rate at a record low of 0.5 percent.

Bank of England Governor Mervyn King said this week “a significant degree of policy stimulus is appropriate” given Britain’s exposure to turmoil in Europe. Leaders from the region, the destination for more than half of U.K. exports, will meet Oct. 23 in Brussels to discuss the debt crisis.

In the euro area, consumer confidence fell to minus 19.9 in October, the lowest in more than two years, from minus 19.1 in September, the European Commission said yesterday.

--Editors: Fergal O’Brien, Andrew Atkinson

To contact the reporter on this story: Jennifer Ryan in London at jryan13@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


American Apparel's Future
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus