Debt dampens consumer spirit

Nationwide’s Consumer Confidence Index recorded a one point climb in May, now standing at 94.

However, this is still close to a six-month low and below the figures recorded during 2004 and 2005, with many consumers still anxious in the face of an anticipated rise in interest rates and uncertainties about job prospects.

Nationwide executive director Stuart Bernau said that low levels of consumer confidence were not surprising, given that many consumers are burdened with high levels of debt, leading to an increase in individual insolvencies and continually high energy prices.

“It is a testament to the pressures facing consumers that the Bank of England finally made a downward revision to its forecast for consumer spending for this year,” said Mr Bernau.

“Perhaps the imminent start of the World Cup and the possibility of success for the England team will help lift spirits and give consumer confidence levels a much needed boost,” he added.