House price expectations steady
This is according to the Nationwide Consumer Confidence Index, which remained unchanged for the second consecutive month in November, staying level at 73 points.
Notably, the Present Situation Index saw a small fall in November following recent monthly increases – dropping two points to 20 from a six month high of 22 points recorded in October. By contrast, the Expectations Index increased by one point to 108 during the month, following a three point fall in October. The Spending Index also recorded an increase in November, rising two points to 106.
Martin Gahbauer, Nationwide’s chief economist, said: “Confidence remained stable for a second consecutive month in November suggesting that consumer sentiment is holding steady at the end of a volatile year for the index. At the beginning of 2009 we saw consumer confidence drop to record lows, but we have since seen this index return to pre-recession levels.
“In the last few months, consumer confidence has lost some of the upward momentum evident earlier in the year, and this is largely due to ongoing pessimism about the current economic situation rather than expectations for the future. The downbeat assessment of the present situation is consistent with recent news that the UK has been slower to come out of recession than other countries. However, expectations for the next six months have not abated and remain at a high level.”
Of those questioned during November, 84% believe that the economic situation will be the same or better in six months’ time – an increase of 1% from October. Just 14% now believe that the economic situation will be worse in six months’ time. This is the lowest level it has reached since the index began (May 2004). The number of people who believe that their household income will be higher in six months’ time fell to 15% during the month, down from 17% in October. However, the percentage of those who believe it will be the same increased by 2%, reaching its highest ever level at 73%.