Consumer confidence on the slide

Consumer confidence has seen a marked decline so far this year, the British Retail Consortium (BRC) has said.

According to the latest readings of the consumer confidence index conducted by the BRC and Nielsen, there was a drop of nine points from the last three months of 2010 to the first quarter of 2011.

This survey suggests the UK is becoming a nation of savers. Despite low interest rates, the most popular thing to do with spare cash is put it into savings accounts, with 34 per cent of respondents trying to keep money wherever possible.

Almost one in three of those polled during the survey listed the economy as a major concern. Fuel prices were also a continuing worry, with 21 per cent citing them as either their first or second concern.

Stephen Robertson, the BRC’s director general, commented: “Nearly a third of people now say they have no spare money because households are suffering a squeeze between high inflation and low wage growth. In real terms, disposable incomes have fallen for the first time in 30 years.

“With inflation expected to rise further and average earnings showing only minimal growth, disposable incomes will be under continuing pressure for the rest of the year and beyond. The prospect of interest rates beginning to rise as the housing market weakens can only dent consumer confidence further over the coming months.”