Rate rises hit consumer confidence

July 4, 2007

Consumer confidence fell for the first time in six months during June, as people braced themselves for higher interest rates, a survey showed.

The drop wiped out half of the strong rise in confidence recorded in May, with people worrying about the economy and jobs both now and in six months’ time, Nationwide Building Society said.

Consumers’ willingness to spend money was the only index to rise during June, increasing by two points, although it still remains broadly flat for the past six months and significantly lower than it was this time last year.

The research comes as the Bank of England’s Monetary Policy Committee begins its two-day interest rate setting meeting. It is widely expected to announce a further hike in the cost of borrowing on Thursday.

Channel 4 – News – Rate rises hit consumer confidence