by Michael Smith (Veshengro)
Consumer confidence fell to an all-time low in February 2011, fueling doubts about the strength of the economic recovery.
Nationwide Building Society’s consumer confidence index fell by ten points to 38 last month – its lowest level since the survey began in May 2004 – after another sharp drop in January of the year.
The record fall was driven by a steep decline in consumers’ expectations of the economic and employment situation over the coming six months. A growing pessimism among consumers towards making purchases also pushed the survey’s spending index down to 52 points in February. The survey comes on the back of figures from the British Retail Consortium which showed that like-for-like retail sales fell by 0.4 per cent last month.
Nationwide’s chief economist Robert Gardner said: “A fall in expectations towards the future was the main factor driving the index down, and consumers’ assessments of the present situation deteriorated slightly from already depressed levels. “There are many factors that may be holding back confidence at the moment. The labour market remains fragile, with the unemployment rate still high and wage growth weak.”
Figures from the Office for National Statistics published last week revealed that unemployment in the UK rose to a 17-year high in the three months to the end of January. Despite reports suggesting the economy bounced back in the first quarter of the year, the Nationwide research showed consumers are still pessimistic about the current situation.
The index measuring consumers’ assessment of the present economic climate in February fell to 20 from 23 in January, its lowest point in 18 months and not far off its record low seen during the recession.
Gardner added: “Inflation is showing few signs of easing, and high fuel prices and the VAT increase have further eroded disposable incomes in recent months.” “More generally, the UK recovery remains sluggish and there was little positive news in February to give consumers a much needed boost.”
This is proof, if any be needed that (i) the public do not buy any of the claptrap of the recession being over and (ii) that the Great Recession continues and, if people do not buy then, well, it does continue fort the economy will go even further south.
While the banks, and government stupidity, got us into this mess the banks and bankers enjoy ever greater incomes and bonuses while the poor workers are being squeezed, and especially by the austerity measures of the government.
They cause all the grief and the poor man, woman and child have to carry the can and the burden.
Government services are facing the axe or have already been axed while the banks, some of which are, basically, taxpayer owned, squander the money they do make on bonuses and salaries of bankers in the region of the millions of pounds.
Government should claw that all back and not permit any of such salaries and bonuses to be paid out, but they don't dare to do that.
So, the ordinary man or woman on the street and the poor kids in schools and homes are the ones that have to carry the burden of the austerity measures and thus people have no intention of spending any money on consumer goods on the high street or via e-store.
So, Mr. Chancellor, please do tell us again how great the economy is doing...
© 2011
