Stuart BernauTHE terrorist attacks in London have failed to dampen consumer confidence according to a survey by Swindon-based Nationwide.

The Nationwide Consumer Confidence Index found optimism at its highest level since April despite the bombings in the capital on July 7 and subsequent attempted attack two weeks late.

The monthly survey takes into account the general economic situation, employment condi-tions and people's personal expectations.

Stuart Bernau, Nationwide executive director, pictured, said: "The index shows that consumer confidence rebounded in July following steep falls in May and June.

"It appears that fears about a downturn that existed in recent months have lessened."

He added: "The recovery in sentiment occurred despite the terrorist activities seen in July, which had the potential to dampen confidence."

In July, four out of the five components which make up the index rose. The only one to fall was the household income outlook.

Economists predict there is a good chance the Bank of England will cut rates tomorrow.

Nationwide claim the rise in confidence in July can be put down to fears about the economy not coming true.

It says the labour market is strong and there has been some increase in retail and housing market activity.

However, Nationwide warns there is still economic uncertainty, so consumer confidence may continue to change.

The NCCI is based on the American Consumer Confidence Index which has been in use since 1967.

The building society works with TNS, the same group that conducts research for the US Consumer Confidence Index.

Stephanie Tye