Confidence among British consumers declined in March as this month's budget failed to calm households' concerns about the prospects of the economy.
Research firm GfK NOP reported Friday that its consumer confidence index fell to -31 in March from -29 in February and January. Economists had forecast the score to remain unchanged at -29.
Consumer confidence has returned to the weak levels of the second half of 2011, emphasizing just how fragile the improvement in January and February was, GfK Social Research Managing Director Nick Moon said.
The index shows that consumers are becoming increasingly pessimistic about their personal economic circumstances over the next twelve months, a worrying sign for the already hard-pressed retail sector, Moon added.
The indicator assessing one-year ahead expectations for the economy fell to -30 from -29 in the previous month. The gauge assessing climate for major purchases declined more sharply to -31 from -27 in February.
The index measuring households' outlook for their own financial situation over the next 12 months dropped to -10 from -6. Consumers' view about the general economic situation over the last year declined -59 from -60 and that of personal financial condition over the same period slipped to -25 from -21.
The 'now is a good time to save' Index increased one point to -13, which is nine points lower than March 2011.
Moon said "with this month's budget unlikely to have a positive impact on consumer spending, shops will be hoping that the bumper summer of the Diamond Jubilee weekend and the Olympics can bounce people from their present malaise."
"These figures make depressing reading for the government, especially when you consider that the index has been mired within a couple of points of the present levels for the last nine months," he added.
On Wednesday, the Office for National Statistics revised down the UK's fourth quarter gross domestic product figures to show a 0.3 percent decline. Though the fourth quarter economic contraction was worse than initially thought, the economy is expected to avoid a technical recession.
by RTT Staff Writer
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