U.K. consumer confidence rose in November from a record low as Britons’ expectations for the economy improved in the run-up to Christmas, Nationwide Building Society said.
An index of sentiment increased to 40 from 36 in October, which was the lowest since the survey began in 2004, the Swindon, England-based customer-owned lender said in an e-mailed report today. A gauge of consumers’ expectations rose 7 points to 55.
“A small rise in consumers’ expectations toward the future helped to drag consumer confidence up from October’s nadir,” Robert Gardner, chief economist at Nationwide, said in a statement. Nevertheless, the index is “almost 40 points below its long-run average, suggesting that consumers remain under pressure and concerned about future prospects, both for the wider economy and their own financial position.”
Unemployment hit a 17-year high in the three months through October, which may restrain confidence among households. Bank of England Chief Economist Spencer Dale said in an interview last week that the economy faces the risk of at least one quarter of contraction and that policy makers have scope to expand stimulus to aid the recovery.
Nationwide’s gauge of Britons’ assessment of their present situation was unchanged at 18 in November, it said. An index of shoppers’ views on whether it’s a good time to make a major purchase, such as a house or car, rose 2 points to 77. Nationwide surveyed 1,000 people between Oct. 24 and Nov. 20.
Slowing inflation may have helped improve consumers’ expectations, Nationwide said today. Consumer-price growth eased for a second month in November and Bank of England Governor Mervyn King has said he expects the rate to drop “sharply” next year.
“Signs that inflation has passed its peak may have provided some comfort, but at 4.8 percent in November, the cost of living was still rising at more than twice the pace of underlying wage growth,” Gardner said.
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