Business

UK consumer confidence 'in sharp fall'

Shoppers in Bristol
Image caption Nationwide said consumers were concerned about the forthcoming government spending cuts

Consumer confidence is now at its lowest level for more than a year, the Nationwide building society has said.

Its monthly Consumer Confidence Index fell to 53 for September, down nine points from August.

Nationwide said sentiment had been hit by fears about the government's forthcoming spending review, which is expected to cut public sector jobs.

Its report came a day after the British Retail Consortium (BRC) said the rate of retail sales growth was slowing.

The BRC also blamed the spending review, which will be unveiled on 20 October, saying consumer confidence was "fragile".

Nationwide also backed up a finding of the BRC that consumers were cutting back on expensive purchases.

Martin Gahbauer, Nationwide's chief economist, said he expected consumer confidence to remain "volatile" until the full impact of the government's spending cuts was known.

The report added that retailers may have "a cause for concern" in the run up to Christmas.

Nationwide said consumer confidence in September was at its lowest level since May 2009.

Its subsidiary monthly Spending Index - which reflects sentiment regarding spending on household goods and major purchases - fell in September to its lowest point since November 2008.

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