Consumer Confidence at a 12 year Low

Research group GfK NOP’s has reported that consumer morale fell for a fourth consecutive month in October, with shoppers more reluctant to make major purchases than at any time since 1995. It confidence barometer fell to -8 in October from -7 in September, roughly in line with analysts’ forecasts. The fall takes the index to its lowest since March and suggests that higher mortgage payments and tougher credit conditions are forcing many shoppers to tighten their belts to weather the storm. GfK NOP also revealed that the climate for major purchases index fell to -5 from -3 in September. This measure, which was +6 in October last year, is now at its lowest level in nearly 12 years. “Low consumer confidence and an increasing reluctance to make major purchases do not bode well for consumer spending,” said Howard Archer, chief UK economist at Global Insight. “This is particularly worrying for retailers as the critical Christmas period looms.”