Consumers More Optimistic Over Spending
Consumer confidence was more positive in March, but still remains poor following February’s record low, new figures reveal.
The Nationwide Building Society’s Consumer Confidence Index for March 2011 showed a rise of five points in March; however, assessments over personal situations remained subdued. The Present Situation Index rose by just one point to 21.
The Spending Index records whether consumers judge this as a good time to make household or major purchases. The Index rose to 66 points in March experiencing a rise of 13 points.
This Spending Index has not risen since the introduction of the 20 percent VAT rate rise at the beginning of 2011.
“After a fairly dismal start to the year there was some respite in March with consumer confidence picking up from the record lows seen in February,” said Robert Gardner, Nationwide’s chief economist.
“The full impact of higher interest rates on confidence will depend crucially on the economic background against which they take place as well as the size and pace of any increases.”
Robert Gardner states the improvement in confidence was driven by the nation’s slightly more upbeat assessment of their personal situation and their expectation for the economy.
The Spending Index in March which saw an increase in 13 points shows a more optimistic mood in the run up to the Budget.
“As the field dates for March’s survey pre-date the Chancellor’s Budget, it won’t be until April’s figures are available that we will be able to assess how confidence has responded,” Robert Gardner added.
Consumers who believe conditions will be the same or better in the next six months make up 60 percent of those questioned. This is however, still below the 81 percent who felt this way last year.
For those who are concerned about their current level of spending, a prepaid debit card could help them budget their monthly outgoings.