December 21, 2011 / 12:05 AM / 9 years ago

Consumer morale falls to lowest in nearly 3 years

Shoppers walk pass sale signs and a busker along Oxford Street on the penultimate Saturday before Christmas in London December 17, 2011. REUTERS/Luke MacGregor

LONDON (Reuters) - Consumer morale hit its lowest in almost three years in December as households’ became much more pessimistic on the outlook for the next 12 months, a survey from researchers GfK NOP showed on Wednesday.

GfK NOP’s headline consumer confidence index edged down to -33 from -31 in November, its lowest reading since February 2009 and slightly below the average forecast of -32 in a Reuters poll.

“Optimism has not been lifted by pre-Christmas spending and it is hard to see grounds for a recovery in confidence in the near future,” said Nick Moon, managing director of GfK NOP Social Research.

Consumers’ more downbeat view of the year to come was the main factor pushing the index down, with this component falling a hefty 8 points on the month to -41, the lowest since January 2009.

The survey, conducted December 2-11, came in the immediate aftermath of Chancellor George Osborne’s November 29 budget statement, which unveiled a big downgrade to 2012 growth forecasts and further austerity measures.

Weak consumption has been a major reason behind Britain’s disappointing growth performance in 2011, as the government has reined in spending to tackle the deficit and households have dealt with falling real wages and rising unemployment.

“The 8 percent drop in the score for the general economic situation over the next 12 months is significant and will make chilling reading for the government and British businesses,” Moon said.

The Bank of England has pencilled in an improvement in household consumption in 2012, due to a forecast slide in inflation, but the euro zone debt crisis is casting a major shadow over businesses’ and consumers’ willingness to take risks.

The GfK NOP survey is conducted on behalf of the European Commission, and covers 2,000 people.

Reporting by David Milliken; Editing by Susan Fenton

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