July saw another fall in consumer confidence, with Nationwide’s confidence index dropping by seven points to 56.
This is the third consecutive month that the index has fallen and it now stands at a similar level to May 2009. The Expectations Index saw the biggest fall in July – dropping by 13 points – continuing the trend seen since February 2010.
Consumers’ faith in the spending situation also deteriorated during July with the Spending Index decreasing by three points. At 93 this index now stands only slightly above its long-run average of 91.2 points. The Present Situation Index remained unchanged during the month and continues to struggle to recover from its all-time low of 16 points seen in July 2009.
In line with recent house price figures, consumers expressed a more guarded optimism towards the housing market in July. Consumers now expect the value of their home to increase by just 0.4% over the next six months – a decrease of three tenths of a percentage point from June’s figure.
Martin Gahbauer, Nationwide’s chief economist, said: “Consumers continued to show caution towards the strength of the economic recovery during July. The index has now seen three consecutive months of decline and this has largely been fuelled by uncertainty as to what the next six months hold. In particular