Outlook for the UK economy remains bleak as consumer put large purchases on hold due to a lack of confidence in their own financial situations and the economy as a whole. A report by the Nationwide Building Society revealed that this pessimism stretches back to before the riots and the global financial turbulence seen earlier this year.
Consumer confidence has taken blow after blow this year, with the UK’s economic growth failing to meet targets and wages stagnating in the face of high inflation and increasing energy bills. Robert Gardner, Nationwide’s Chief Economist stated: “With the economic recovery still facing strong headwinds it is unlikely that we will see any considerable improvement in confidence in the remainder of 2011.”
Over half of the people quizzed in the survey thought it was a bad time for a big ticket purchase such as a house or a car. The statistics gathered by Nationwide show consumers erring on the side of caution more and as 2011 goes on, with the exception of a brief burst of spending around the time of the royal wedding.
Gardner went on to predict further damage in August, following rioting in many of the UK’s major cities and sharp falls in stock markets across the globe, summing up by saying; “Overall, conditions for the UK economy remain challenging, especially for consumers.”
An IFO report revealed a similar lack of confidence from both consumers and businesses in Germany, while statistics from the USA have picked up for the first time in months, with significant increases in several areas, including durable goods and vehicle orders..