Consumer confidence falls for the fourth consecutive month

A survey has established that consumer confidence has fallen for the fourth consecutive month in October showing that shoppers are more reluctant to make major purchases than at any time since the mid 1990’s.

Research group GfK NOP’s consumer confidence barometer fell to -8 in October from -7 in September. This was in accordance with analysts’ expectations and therefore, caused little reaction within the market.

The fall takes the overall index to its lowest since March and indicates that higher monthly mortgage repayments and stricter credit conditions are forcing shoppers to be more cautious with their spending habits.

Howard Archer, chief UK economist at Global Insight, said low consumer confidence and a growing reluctance to make major purchases do not bode well for consumer spending which makes it especially worrying for retailers as the festive period approaches.

The climate for major purchases index fell to -5 from -3 in September. This measure, which was +6 in October 2006 and now at its lowest level since 1995.

Mr Archer concluded however, that for the coming year, people are more positive in their forecasts indicating a more encouraging outlook for the future.

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