Although the majority of us have had to tighten our belts by quite a few notches, the latest figures from the Nationwide Consumer Confidence Index has indicated that customer confidence has risen slightly and for November stands at 40. This isn’t as good news as it first seems however, as this is only a tiny rise on the record low of 26 in October, and is way below 77, which is the long term average.
Even though Nationwide have also said that there have been small improvements in the prospects of both unemployment and household incomes, their chief economist, Robert Gardner has pointed out that between them, these figures are hardly cause for festive cheer.
There was more encouraging news from the Nationwide spending index however, which measures actual spending as opposed to consumers feelings about spending, as this rose in November by 2 points, and Nationwide said that shoppers on the whole had been more enthusiastic about making purchases for the home.
The same can not be said of large purchases such as houses and cars for example, as twice as many consumers have now said this is a very bad tine to be making a major purchase as those who have said it is. This isn’t really surprising when you consider that those who were surveyed thought that over the next 6 months, house prices would fall by another 1.1%.
Gardner also pointed out that the very fact that inflation has dropped to 4.8% gave an indication that things were possibly about to improve, but conditions were still tough. He said that the signs were there that inflation had passed its peak, and while this many provide some comfort the cost of living in November was rising at more than twice the rate of the underlying wage rise, and unemployment has also risen sharply.