Confidence among the UK's consumers declined unexpectedly in February as they turned more pessimistic about the economy's prospects amid rising unemployment and tight austerity.
The latest survey by the Nationwide Building Society showed Friday that the consumer confidence index fell to 44 from 47 in January. Economists expected the reading to remain unchanged from January.
Though the latest score remained more than 30 points below the long run average, it is still above December's record low.
"After showing signs of cautious optimism at the start of the year, consumer confidence slipped back in February," Nationwide economist Robert Gardner said. "Weak labor market conditions combined with weaker-than-expected economic growth are continuing to weigh on confidence," he added.
The survey report also showed that a measure of consumers' expectations for the economy fell 4 points to 60. An indicator of households' assessment of their present situation fell 2 points to 19. Also, an index of their assessment on "whether it's a good time to make a major purchase" fell 1 point to 78.
Unemployment rate among Britain's youth climbed to a record high during November-January, data showed last week. Overall unemployment rate for the period stood at a 16-year high, while jobless claims marked yet another month of increase in February.
Reflecting weaker sentiment, retail sales fell by a larger-than-expected 0.8 percent month-on-month in February, official figures showed yesterday.
In the budget speech on Wednesday, Chancellor George Osborne said the U.K. economy is likely to avoid a technical recession and may expand faster than expected earlier.
Osborne said the Office for Budget Responsibility (OBR) has revised up its growth forecast for the U.K. economy this year to 0.8 percent. The economy is seen expanding 2 percent next year. The OBR expects unemployment to peak at 8.7 percent this year, before dropping each year to 6.3 percent by the end of the forecast period.
by RTT Staff Writer
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