Consumer confidence hits the bottom, finds survey

LONDON: Consumer confidence is at its lowest in a year, after a fall in September abetted by a bleak prospect for the economy, says a report by consultancy firm GfK Martin Humblin.

The firm, which maintains a confidence barometer, said the reading for September fell to -5 from -4 in August, the lowest reading since October 2004, when it was -6.

However, economists are not worried. In broad terms, they say, this is an indication of stability for the consumer’s sentiments. Even a decision by Bank of England to keep the interest rates at 4.5 per cent will not alter this situation, they feel.

The survey, however, indicated that when it came to major spending, people were not unduly worried. The index measuring whether it was a good time to make major buys rose to +9 from +8.

According to the firm, the decline in the main index was essentially on account of a fall in the sub-index measuring optimism over the future course of the economy — it fell to -16 from -13. The respondents to the survey were also concerned about their personal financial situation as the concerned sub-index fell to +10 from +12.

The findings are almost in line with those earlier this week of Confederation of British Industry, which said retail sales in September reached the lowest in 22 years.

The Office of National Statistics too had revised down annual GDP growth to just 1.5 per cent in the second quarter, the lowest level in 12 years.