December 21, 2010 / 12:04 AM / in 9 years

Consumer morale steadies at low level in December

Shoppers are silhouetted on Oxford Street during the last shopping weekend before Christmas, in central London December 18, 2010. REUTERS/Luke MacGregor

LONDON (Reuters) - Consumer confidence stayed at its lowest level since July this month, and only shoppers’ desire to bring forward big purchases before next month’s rise in value-added tax stopped a further fall, a survey showed on Tuesday.

The GfK NOP December consumer confidence barometer was unchanged at -21, slightly better than the -22 analysts had forecast but two points lower than the same time last year.

The survey’s “climate for major purchases” gauge jumped 10 points, but all other components fell.

“At the moment, consumer confidence is being propped up by one thing: a belief that the run-up to Christmas and the VAT hike is a good time for big-ticket retail purchases,” said Nick Moon, managing director of GfK NOP Social Research.

“Without this one positive, consumer confidence would have fallen to its lowest level in over a year,” he continued.

The prospect of severe government spending cuts next year has cast a shadow over the sustainability of Britain’s economic recovery. Economists reckon as many as half a million public sector jobs could be lost over the next four years.

GfK NOP carries out the survey on behalf of the European Commission.

Reporting by Christina Fincher; Editing by Hugh Lawson

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