U.K. Nationwide Consumer Confidence Rose in August
U.K. consumer confidence rose to the highest level in more than a year in August as signs mounted that the economy is emerging from the worst recession in a generation, Nationwide Building Society said.
An index of sentiment rose to 63, the highest since May 2008, from 61 in July, Britain’s biggest customer-owned lender said in an e-mailed statement today. TNS questioned 1,000 people for Nationwide from July 20 to Aug. 23.
The National Institute of Economic and Social Research said yesterday that the economy has started growing again, and a separate report today signaled the first improvement in the labor market for 17 months. The Bank of England will tomorrow probably stick to its plan to keep spending newly printed money as policy makers try to entrench the recovery, economists say.
“Consumers are beginning to feel more positive not only about the future, but also about the present situation,” Martin Gahbauer, chief economist at Nationwide, said in the statement. “A number of key economic indicators continue to show that we may have reached the bottom of the current recessionary cycle.”
A measure of Britons’ assessment of their present situation rose 1 point to 17, and a gauge of willingness to spend increased to 97 from 96, the report showed. Nationwide’s index of future expectations increased 3 points to 94.
Gross domestic product increased 0.2 percent in the three months through August, compared with a decline of 0.3 percent in the three months through July, Niesr, whose clients include the central bank, said yesterday. That’s the first time GDP has risen since the quarter through May 2008.
Trade Data
The U.K. trade deficit was wider than economists forecast in July as imports from outside the European Union rose faster than exports free credit report. The goods-trade gap was 6.5 billion pounds ($10.7 billion), the same as in June, the Office for National Statistics said today. The median forecast of 15 economists surveyed by Bloomberg News was for a 6.3 billion-pound deficit.
The labor market, where unemployment reached a 14-year high in the second quarter, may be showing signs of improvement, according to a separate report today by KPMG and the Recruitment and Employment Federation. Their measure of hiring for permanent jobs rose to 50.6 last month from 46.1 in July. That’s the first result above 50, signaling expansion, since March 2008.
Brown’s View
“There were some interesting and encouraging signs today but the prime minister’s view is that this is not a time for complacency,” Simon Lewis, Gordon Brown’s spokesman, told reporters today. “The prime minister feels strongly about the need to keep recovery going by maintaining the appropriate level of expenditure.”
The threat of deflation may convince policy makers to keep up their measures to stoke economic growth. Average U.K. shop prices fell 0.1 percent in August from a year earlier, the first annual decline since February 2007, according to a report released today by the British Retail Consortium.
The bank will leave the benchmark interest rate at a record low of 0.5 percent tomorrow, according to all 60 economists in a Bloomberg News survey. All 35 forecasts in another survey are for no change in the 175 billion pounds total that the bank plans to spend in U.K. debt markets with newly printed money.