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UK consumer morale improved in Feb - Nationwide

Published 03/03/2009, 07:01 PM
Updated 03/03/2009, 07:00 PM

LONDON, March 4 (Reuters) - British consumer confidence improved in February for the first time in four months as people became more optimistic about the outlook for jobs and their own finances, a survey showed on Wednesday.

The Nationwide building society said its consumer confidence index rose to 43 in February from a survey low of 41 in January.

The mortgage lender said the improvement in morale had been driven by a pick-up in sentiment about future prospects and spending, possibly as a result of recent interest rate cuts.

The Bank of England has slashed borrowing costs by 4 percentage points since October and is widely expected to trim rates again by 50 basis points to a record low of 0.5 percent on Thursday.

The expectations index, a gauge of sentiment about the economy, labour market and household income over the next six months, rose to 57 in February from 52 in January.

The spending index, which reflects sentiment about spending on household goods and purchases, rose to 92 in February from 85 in January.

However, the survey showed Britons were more gloomy about their current circumstances, with the present situation index falling to 22 from 24 in January.

"Consumers' views about the current economic and labour market conditions are in line with the recessionary climate in the UK," said Nationwide chief economist Fionnuala Earley.

"Spending confidence continues to be resilient, which could reflect the effect of sharp falls in interest rates on consumers' disposable incomes, but is also likely to reflect significant discounts available."

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