Scots among most confident UK consumers

CONSUMER confidence in Scotland is well above the UK average, buoyed by a stable economy and rising house prices, according to the Nationwide Building Society's quarterly survey.

Confidence rose five index points in the first quarter of 2007, with Scotland one of three regions in the UK with an index higher than the UK average, along with London and the south-east of England.

But retail leaders warned the figures did not take into account the recent rise in interest rates and that many shoppers were looking to rein back their spending on larger items such as homes and cars.

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The data reveals Scots are the most confident in the UK with a consumer confidence index of 96 for the first three months of 2007. Just under one in five was positive about the employment situation in six months, compared with a UK average of just over one in ten. Confidence about the current economic situation rose for the second consecutive month, with 40 per cent of Scots upbeat about the current economic situation, an increase of three points on Q4 2006 and above the UK average of 37 per cent.

But just 19 per cent of consumers believe now is a good time to make a major purchase such as a house or a car. This is down three points, the second consecutive fall, taking it below the UK average of 21 per cent.

Rosemary Callender, a spokesman for Nationwide, said: "The interest rate rise at the start of the year, along with concerns about inflation, appears to have dampened consumer sentiment. Looking forward, the increase in base rate in May will inevitably impact on consumers, so any improvement in confidence will to some extent depend on whether people are winners or losers, as increases in debt repayment are offset by falling utility bills this summer."

Fiona Moriarty, director of the Scottish Retail Consortium, said: "This is retrospective data which does not take into account the most recent interest rate rise or the likelihood of another quarter per cent rise next month.

"There is confidence about almost full employment and our wider economic prospects, but there is evidence consumers are thinking twice before making the most major purchases."