Customer confidence in economy 'on increase'

Posted: 10 May 2007 10:03:26 GMT

The Nationwide Consumer Confidence Index has seen a two point increase to hit its highest level since October last year.

The Nationwide Consumer Confidence Index has seen a two point increase to hit its highest level since October last year.

Nationwide says that this rise in customer faith in the market suggests they have come to terms with the spectre of further interest rate rises this summer.

It is the fourth consecutive rise on the index, as peoples' confidence in forthcoming employment and economic changes looks to be more upbeat. The Expectations Index was up two points to 91.

Consumers' outlook on current situations is also on the up, according to the bank. A second consecutive escalation here hints that interest rate rises are not affecting the public's mood, says Nationwide.

Moreover, faith in the property market showed renewed health as the Spending Index rose to 89 - a six point increase.

Nationwide's chief economist Fionnuala Earley said that other factors will influence where the index goes in the coming months.

"The increase in confidence suggests that consumers have come to terms with the recent interest rate rises ... the extent to which this hits consumer confidence will to some extent depend on the impact of falling utility prices this summer against higher debt repayments," she stated.

Interest rates are expected to rise in May to 5.5 per cent and there is debate whether more increases will be needed.

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