Consumers feel less confident about economy

CONSUMERS lost confidence in the economy during the final three months of 2009 and expect the situation to deteriorate this year, according to a report out today.

A third of respondents to the quarterly savings and protection survey by the Association of British Insurers (ABI) believe the economy will slide this year, up from 22 per cent three months ago. Just 39 per cent of consumers think the economic situation will improve, down from 52 per cent in the last quarter. The figures reflected increased concerns over job security, with 31 per cent more worried about their jobs than they were in September, compared with 27 per cent previously.

The decline in confidence has motivated more people to clear their debts, according to the ABI. It said 42 per cent are paying off loans and credit cards faster than before, compared with 34 per cent a year ago. Yet more than two thirds perceive themselves as savers as opposed to spenders, and less than a fifth would prefer to get into debt than go without.

Dr Rebecca Driver, director of research and chief economist at the ABI, said: "These findings highlight how important it is for any government to deliver policies that appeal to consumers' increasing sense of financial responsibility, helping more people become financially independent by increasing saving."