Spending cuts torpedo confidence

CONSUMER confidence has slumped to an 18 month low as government spending cuts affect economic sentiment, according to a benchmark survey. The latest Nationwide consumer confidence index dropped by one point in October to its lowest level since March 2009. The building society said confidence was being eroded by speculation over government cuts and concerns over jobs.

It found that 29 per cent of people expect the economic situation to be worse in six months' time, despite a small jump in the number of people who think the employment outlook will improve. Just 14 per cent of respondents think their household income will be higher in six months' time and almost one in five anticipate it being lower. Housing market sentiment is also downbeat, with people now expecting a 0.9 per cent dip in house prices over the next half year, compared to the 0.1 per cent slip predicted in September.

Martin Gahbauer, chief economist at Nationwide, said: "We saw a significant drop in confidence the previous month, and the underlying anxiety around the strength and direction of the recovery appears to remain," he said. "However, on a positive note, there are signs this month that some faith has returned in relation to the present situation and consumers' propensity to spend in the run up to Christmas."

Hide Ad
Hide Ad

As the festive season approaches single people are more focused on savings than co-habitants and married couples, according to research out today from Bank of Scotland. Its survey revealed that saving is the current financial priority for 29 per cent of single people and just 18 per cent of couples. Just over half of married Scots and almost six in ten co-habitants said they were more focused on reducing their outgoings rather than boosting savings, compared to 39 per cent of single people. More than a quarter of single Scots intend to save between 100 and 1,000 in a savings account over the next year. The proportion drops to just 13 per cent of married people and 15 per cent of those living together.

Related topics: