Consumer morale slips unexpectedly

A woman looks in a shop window in the affluent Kensington district of London October 22, 2009 file photo.

LONDON (Reuters) - Consumer confidence slipped in March as Britons grew more worried about the economic outlook and the state of their finances, a survey showed on Wednesday.

The GfK NOP consumer confidence index, produced for the European Commission, fell one point to -15 after two consecutive months of improvement. However it was still 15 points higher than the same month last year when the economy was deep in recession.

Consumers were clearly more worried about the economic outlook, perhaps due to media coverage of the record budget deficit ahead of the government's annual budget on March 24. The survey was conducted between March 5 and March 14.

The index measuring perceptions of the economic situation over the coming year fell four points to zero, despite a small improvement in people's perception of the economy over the past 12 months.

Consumers were also feeling less confident about their own finances. The personal financial situation index for the next 12 months fell two points to 4 but remained 10 points higher than at the same point last year.

With an election expected in May, the figures will be a setback to the Labour party which had been hoping a return to economic growth at the end of last year would help it cut further into the Conservatives' once-sizeable opinion poll lead.

"With the election only weeks away the government will be disappointed that consumer confidence has slipped," said Nick Moon, managing director of GfK NOP Social Research.

"Particularly disturbing is the lack of confidence in the country's economic performance over the next 12 months. While consumer outlook is more positive than the same time last year, this fall in confidence around budget time does not bode well."

(Reporting by Christina Fincher)