U.K. Consumer Confidence Falls as Economic Outlook Drops to Six-Month Low
U.K. Consumer Confidence Drops on Outlook
Jason Alden/Bloomberg
A shopper adds groceries to her basket at a Marks & Spencer Group Plc (M&S) store in The Westfield Centre shopping mall in London, U.K.
A shopper adds groceries to her basket at a Marks & Spencer Group Plc (M&S) store in The Westfield Centre shopping mall in London, U.K. Photographer: Jason Alden/Bloomberg
U.K. consumer sentiment fell for a third month in August as households grew more pessimistic about the outlook for Europe’s second-largest economy, a report by GfK NOP Ltd. showed.
An index of sentiment slipped 1 point to minus 31 from July, the London-based research group said in an e-mailed report today. A gauge measuring households’ expectations for the economy over the coming 12 months fell 4 points to minus 31, the lowest level in six months.
Confidence has also weakened in the 17-member euro area and the U.S. as Europe’s worsening debt crisis, turmoil on equity markets and signs of a faltering global economy shook consumers. In the U.K., where the government is cutting spending to reduce the budget deficit, the country’s worst riots since the 1980s added to pressure on sentiment.
“The continuing loss of consumer confidence is a major worry for the government,” GfK Social Research Managing Director Nick Moon said in a statement. There are an “increasing number of indicators suggesting the economy is either stagnating or returning to recession.”
The pound was little changed against the dollar, trading at $1.6306 as of 8:38 a.m. local time. The yield on the benchmark 10-year U.K. government bond was also little changed at 2.5 percent.
Personal Finances
A gauge of the general economic situation over the past year held at minus 57 from July, while a sub-indicator measuring households’ assessment for major purchases remained at minus 31, GfK said.
A measure of consumers’ view of their personal financial situation over the next 12 months rose to minus 11 from minus 12, which may indicate that “people are starting to adapt to the austere economic climate,” the statement said.
U.K. economic growth slowed to 0.2 percent in the second quarter from 0.5 percent in the previous three months. The Bank of England held the key interest rate at a record-low 0.5 percent this month, while a deteriorating outlook prompted policy maker Martin Weale and Chief Economist Spencer Dale to abandon a push for a quarter-point rate increase.
A report tomorrow may show manufacturing shrank for a second month in August. An index based on a survey by Markit Economics probably slipped to 49 from 49.1 in July, according to the median of 27 economists in a Bloomberg News survey. A level below 50 indicates contraction.
To contact the reporter on this story: Fergal O’Brien in London at fobrien@bloomberg.net
To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net
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