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06 April 2006
Consumer confidence for last month has stabilised but remains low, reveals the Nationwide Consumer Confidence index.
In March consumer confidence rose by one point, following four months of steady decline, but remained below its three-month average. Indices for expectations, spending and present situation also remained below this average, suggesting that although the economy is beginning to recover, customers remain cautious, says Nationwide.
"Low confidence and continued caution on the part of consumers pose challenges to the economy and the MPC [Monetary Policy Committee]," said Nationwide executive director, Stuart Bernau.
"The MPC is reluctant to cut interest rates due to price pressures and some better economic news, but it is beginning to express more concern about the continued sluggishness of consumer spending after a strong Christmas."
The spending index experienced a small one-point rise, following an eight-point fall in February but is expected to pick up due to the recent strength of the housing market which could encourage more spending, says Nationwide.
However, despite the housing market's recent strong performance, consumer expectations of house prices are "muted", with people expecting house prices to rise by 2.2 per cent in the next six months, down from 2.4 per cent in February.
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