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Financial Confidence 'Continues To Weaken'

Mar 17, 2008
Britons are becoming increasingly worried about their finances, new figures show.

In partnership with Taylor Nelson Sofres, Nationwide's most recent consumer confidence index reveals that the country's optimism with regard to money hit a record low over the course of last month. During February, the chart dropped by three points to stand at 78.

Nationwide's present situation index, which tracks the public's views towards current employment and economic prospects, plummeted by seven points to reach 76 in February. At present, a third of Britons believe that the monetary climate has worsened. Meanwhile, their expectations about the future condition of the country's work and monetary sectors stood at 79. Although this was a figure that is unchanged from January, in February 2007 this index was at 86.

Following on from such monetary concerns, it may be possible that a significant number of people find that they encounter difficulties in meeting various demands on their spending. Such areas could well include personal UK loans, credit and store cards, household bills and mortgage costs.

Further research by the financial services firm showed that just over one in ten (11 per cent) Britons believe that now is an ideal time to make major purchases such as a car or a house. However, during the same period in 2007 this figure stood at 23 per cent. The drop was attributed to the diminishing availability of credit and the weakening property sector. Overall, the spending index indicated a drop of four points during February to 64.

Commenting on the figures, Martin Gahbauer, senior economist for Nationwide, said: "The continued downward trend in consumer confidence is to be expected given the effect of higher food and fuel costs on people's pockets and the tightening of the availability of credit. In addition, growing uncertainty about future economic conditions is also likely to have affected consumers' overall sentiment.

"Despite this, consumers remain relatively positive about their employment situation both now and in six months' time. It is perhaps too early for the base rate reduction at the beginning of February to have had any effect, but it is unlikely in current conditions that consumer confidence will return to the highs of 2007."

In addition, Nationwide claimed that there is an 80 per cent chance that the Bank of England's monetary policy committee (MPC) will choose to maintain the base rate of interest. Due to meet tomorrow (March 6th), the financial services firm also reported there is a 20 per cent likelihood of the MPC electing to reduce rates by a quarter of a per cent. Such a move would result in interest charges of five per cent.

Ahead of the Bank's decision, those consumers who are concerned about their capacity to manage their finances may wish to consider getting a quick loan. By applying for a loan, borrowers may find that they can meet numerous spending demands effectively and make major purchases. In addition, a loan might be of assistance to those looking to get to grips with their money. A recent Friends Provident study revealed that 41 per cent of Britons are looking to create a budget to help them sort out their spending, with 75 per cent believing that if they switch to more competitive financial products they will be able to save money.
About the Author
Steve Smith writes for 1 Stop Finance Shop. A one stop shop for all your bad credit loans, debt consolidation loans and personal loans.Visit Today
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