LONDON (Reuters) - Consumer morale sank to its second-lowest level in the last seven years in December, as households’ expectations for the first half of 2012 took a tumble, a survey by the lender Nationwide showed on Thursday.
Nationwide’s consumer confidence index dropped to 38 in December from 40 in November. This was only just above October’s reading of 36, the lowest since the survey started in 2004.
“While disappointing, the results are not surprising. Right to the end, 2011 was an extremely tough year for UK consumers,” said Robert Gardner, Nationwide’s chief economist.
Nationwide conducted the survey of 1,001 people from November 21 to December 23, a period that covered both finance minister George Osborne’s gloomy autumn financial statement and a deepening of the euro zone debt crisis.
The ‘expectations’ component of the Nationwide index sank to 50 from 55, while the ‘spending index’ held steady at 77 and the ‘present situation index’ rose to 19 from 18.
As well as the bleak outlook for 2012, high inflation, slow wage growth and rising unemployment have all depressed consumer sentiment.
Reporting by David Milliken; Editing by Hugh Lawson