Consumers cut their spending (From The Wiltshire Gazette and Herald)

Consumers cut their spending

CONSUMERS are increasingly uncertain about the country's economic future.

That's the finding of Swindon's Nationwide building society, which has taken the temperature of the public's spending habits.

The society Britain's largest started monitoring confidence last June.

In March it seemed things were on the up after a gloomy Christmas, but now things are less rosy, possibly as a reaction to cooling house prices.

There were five interest rate rises in the 10 months to August last year, which has slowed house price increases.

In general the economy has slightly calmed, with caution setting in. However, confidence in the economy as it currently stands increased slightly.

Nationwide said that in April consumers paid back £40 million more on credit cards than was spent the first time since May 1994 that the overall amount of borrowing on cards has dropped. And May also saw warnings from high street chains including Boots and Marks and Spencer that trading conditions are tough at the moment.

Nationwide's executive director Stuart Bernau, pictured, said: "There's been a noticeable change of sentiment this month and people now seem to feel much more uncertain about the future.

"With house prices cooling, consumers seem less optimistic, tightening their belts and looking to reduce their debts rather than spend on the high street.

"People seem particularly uncertain about the future of the economy, jobs and income and it could be that the next couple of months are critical to the future direction of the economy."

In light of this, Nationwide thinks there is only a one in 100 chance of a interest base rate increase, and a nine in ten likelihood it will stay at 4.75 per cent.

The building society, which employs about 4,000 people in Swindon, uses seven indicators to measure economic confidence.

These are:

economic outlook in six months

employment prospects in six months

household income outlook in six months

spending confidence on major items

(above all fell)

spending confidence on household goods

(unchanged from last month)

current UK economic confidence

current UK employment confidence

(both rose).