Growing pessimism on housing market

Confidence among British consumers stabilised last month, albeit at a low level and with growing pessimism about the housing market.

The Nationwide Consumer Confidence index was a point lower at 52 in October, with the pace of decline easing compared to the 9-point fall seen in September. The index, which now stands some 32 points below the February peak of 84, has now fallen in five out of the last six months.

The expectations index – a gauge of the outlook among consumers – fell to its lowest level since March 2009, declining by 4 points to 70 amid growing pessimism about the future. Consumers were also more bearish about housing, expecting the value of their homes to fall by 0.9 per cent over the coming six months. That contrasts with predictions of a 0.1 per cent rise in September.

The spending index, on the other hand, rose by 6 points to 92, boding well for retailers as Christmas nears.

"There was little change to overall confidence during October, which may have been a result of consumers waiting to see what the Government's Spending Review would bring," Nationwide's chief economist, Martin Gahbauer, said.