By Max Clarke
There was more good news for the UK economy this morning after consumer confidence appeared to pick up, having last month dipped to its lowest point since the Nationwide Consumer Confidence index was started in 2004.
Beginning at a default 100 points, UK consumer confidence slipped down last month to a record low of 39 points and has now climbed 5 points to 44. January’s VAT rise and declining disposable income were contributing factors to the decline.
"After a fairly dismal start to the year there was some respite in March with consumer confidence picking up from the record lows seen in February", commented Nationwide's chief economist Robert Gardner. "While this is a welcome change in direction, we must remember that the Index remains at a historically low level, and the up tick in March failed to reverse the fall suffered in the previous month. When we compare the Index to its long-term average of 80 points it is clear that we will need to see a succession of increases before we can say that confidence has returned anywhere close to pre-recession levels
This week has also seen surprise falls in unemployment and in inflation, as well as significant jumps in overseas trade closing the trade deficit to its lowest level for two years, prompting renewed hope in economic recovery.
Despite signs of economic recovery, Gardner cautioned: “With the recovery still proving sluggish, it is unlikely that we will see a significant improvement in the coming months. It is far more likely that confidence will remain subdued for several months yet until the economy gains greater momentum.”