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Consumers Losing Confidence

Jun 6, 2008
An increasing number of Britons are becoming worried about their finances, according to a new study.

In research undertaken by Gfk NOP, it was unveiled that the nation's financial outlook has continued to slide. The research company announced that the overall index which measures British opinions on the economy slid to -29 during may. A figure like this represents a fall of five points from the -24 seen in April and down from -2 which was recorded 12 months ago.

The company's index measuring buyers perception over their personal financial situation during the past 12 months was shown as falling by three points to stand at -11, the lowest figure recorded since the end of 1995. However, predictions over how they will manage money over the next 12 months is similarly grim. This index is at -4, a fall of 17 points from May 2007.

Due to such worries about their personal finance situation, it is quite possible that consumers are struggling to meet demands on their spending such as credit cards, loans and household bills.

Additionally, the measure tracking how the economy as a whole has fared over the past year is at -58, a decline of 40 points from the study conducted a year ago and the lowest figure seen for over 15 months. On top of that, expectations about the nation's general financial situation stands at -39.

Research from the company also showed that the index taking measure of whether or not consumers believe that it is a good time to make a major purchase has continued falling. Such a measure was indicated to be currently standing at -32, a fall of 8 points from April data and 36 below May last year. The recent figure was also reported to be the smallest score ever recorded since Gfk NOP began its study in the early 1980s.

However, for consumers who are thinking about making a purchase, which could include a vehicle or property, using a cheap personal loan to fund such buying may be a good idea.

And with the public holding such concerns about their financial status, it is safe to imagine that more people will want to put more thought towards saving for the future. However, it would appear that this is not really the case as the index tracking whether people think that now is a good time to plan for the future has dropped. Down by three over the course of May to stand at +25, the index stands ten points lower than during the same period in 2007.

Speaking about the results, Rachael Joy, from GfK NOP's consumer confidence team, said: "UK consumer confidence continues its decline and we are seeing levels not recorded since 1990; we are at a massive 27 points lower than this time last year. Buyers' confidence in the economy over the next year, plus a reluctance to make major purchases, reflect the popular expectation of a recession - both these measures are at the lowest level on record. The future months may see even further fall in confidence, as rising inflation and dropping house prices make reigning in their spending even more likely to the UK consumer"

Those consumers who are worried about their ability to cope over the rest of the year may be well advised to take out a cheap loan. In doing so, this may allow consumers to meet various constraints on their spending at once, leaving them with a single affordable repayment to make each month. This might be of assistance to a significant number of consumers after Michael Coogan, director general for the Council of Mortgage Lenders, expressed disappointment at the Bank of England's decision to keep interest rates unchanged last month. He claimed that although most consumers should be ok, the housing and mortgage markets will encounter problems over the course of 2008. Mr Coogan advised those worried about their ability to manage their money to contact their loan officer or a financial advisory service immediately.
About the Author
Mark Dawson writes for the the Loan Arrangers where you can compare loans and apply online for cheap secured UK loans, and bad credit loans.
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