December sees consumer confidence decline

by Richard Kilner

Story link: December sees consumer confidence decline

Snow was not alone in falling during December, with confidence down during the festive season according to Nationwide.

Consumer confidence slumped by 5 points to 69, the largest fall during the whole of 2009.

The Consumer Confidence Index also showed that 95% of those surveyed expect the Bank of England to retain rates at the historic low of 0.5%, with only 5% thinking a rise of 25 basis points will occur.

Expectations for the future have also declined, with only 34% believing things will be better in six months’ time, down from 41% in November.

Chief Economist Martin Gahbauer has said that overal 2009 has seen confidence improve, despite the declines at the end of the year.

The fall in confidence may be caused by numerous tax changes in the near future, Gahbauer added, particularly the raising of VAT back to 17.5% after a year at 15%.