UK Consumer Confidence Plunges to Record Lows

For the fifth month in a row, consumer confidence in the United Kingdom declined, dragging the index to an all-time low for the month of November. Worries about the eurozone crisis and the slowing domestic economy have affected consumers’ pessimism, according to the key survey by Nationwide.

The monthly survey showed a sharp deterioration in consumers’ expectations for the job market and economy, with only 13 percent of respondents expecting the economic situation to be good in six month’s time.

For the fifth month in a row, consumer confidence in the United Kingdom declined, dragging the index to an all-time low for the month of November. Worries about the eurozone crisis and the slowing domestic economy have affected consumers’ pessimism, according to the key survey by Nationwide.

The monthly survey showed a sharp deterioration in consumers’ expectations for the job market and economy, with only 13 percent of respondents expecting the economic situation to be good in six month’s time.

Find out more about EconomyWatch’s real-time Global Consumer Confidence Index: Crowdsourcing the future

Commenting on the report, Nationwide’s Chief Economist Robert Gardner said the index was more than 40 points below its long-term average of 78.

[quote]A wave of disappointing economic news at home and uncertainty surrounding the euro crisis has dealt a blow to sentiment.

Pressures on household budgets have also intensified, with underlying wage growth running at less than half the rate of inflation and the jobs market showing signs of weakness. Mounting concerns about the state of the economy was a key factor undermining confidence in October. [/quote]

It is believed that the Bank of England’s bout of quantitative easing (QE) would help stimulate economic demand. But Gardner warned it would “take some time before the benefits are felt by consumers.”

Businessweek reports that Bank of England Governor Mervyn King said Wednesday the U.K. economy faces a “markedly weaker” outlook amid persistent danger from turmoil in the euro area.

The Bank’s forecast show a heightened risk of a double-dip recession and flagged that it may have to pump even more money into the economy than the additional 75 billion pounds ($117.9 billion) of QE launched in early October.

The findings bode ill for retailers’ business during the crucial Christmas shopping period.

Consumers’ reluctance to spend at a time when soaring prices are outrunning sluggish wage increases and unemployment is at a 17-year high has already been a major drag on the British economy, which teeters on the brink of recession.

Related: UK Economic Indicators: GDP, Interest Rates, Inflation Rates, and other economic data

Related: UK unemployment rate statistics

Related: UK unemployment reaches 17-year high