By Daniel Hunter

Signs of cautious optimism at the start of the year faded somewhat in February, with the overall Nationwide Consumer Confidence Index declining by three points to 44.

The main index remains marginally above the near all time low of 38 recorded in December 2011, but remains more than 30 points below the long run average of 76.

The main components of the index all fell during the month, although the declines were modest, with none falling by more than four points over the month.

Although the Expectations Index dropped four points in February to 60, it stands four points above its level last year.

"After showing signs of cautious optimism in the start of the year, consumer confidence slipped back in February," Robert Gardner, Nationwide’s Chief
Economist, said.

"The decline was fairly broad‐based with an increase in the proportion of consumers describing current economic conditions as bad, and a rise in those reporting unfavourable conditions in the labour market.

“Consumers also scaled back their expectations for the future, with the forward‐looking aspects of the index weakening during the month. Even though interest rates remain at historic lows and the Bank of England opted to inject another £50bn into the financial system in early February, weak labour market conditions combined with weaker than expected economic growth are continuing to weigh on confidence."

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