Nationwide’s Consumer Confidence Report for April shows a small improvement in confidence levels. With the General Election imminent, confidence remains stable, with consumers adopting a ‘wait-and-see’ approach until after the election is over.
The research also highlights some worrying trends for those seeking election on Thursday. While consumer confidence in the economy is relatively high, consumer confidence in politicians is low as people believe that taxes will rise after the election no matter which party wins.
Monthly Consumer Confidence Indicators
Six out of the seven indicators of consumer confidence tracked by Nationwide showed a rise in April following the dip seen in March. The indicators refer to the balance of positive and negative responses:
* Current UK Economic Situation: confidence rose by 3 percentage points
* Economic Outlook in 6 months: confidence rose by 2 percentage points
* Current Employment Situation: confidence rose by 6 percentage points
* Employment Prospects in 6 months: confidence rose by 4 percentage points
* Spending Confidence — major purchase (eg house/car): confidence rose by 5 percentage points
* Spending Confidence — household purchase (eg white/brown goods): confidence rose by 1 percentage point
Just one indicator fell:
* Household income in 6 months: confidence fell by 3 percentage points
This suggests that after the fall in confidence in March, which was reflected in retail sales figures, consumers’ confidence has stabilised. This may have been driven by uncertainty about the next movement in interest rates, with the MPC still split as to its next move with conflicting pressures from rising inflation and subdued high street sales.
Confidence in Politicians Falls
This month Nationwide investigated what impact the three big political parties would have on consumers’ confidence if they were elected.
Economy
On the economy, 60% of people felt that Labour would have either no impact or would improve the economy. 50% felt this way about the Liberal Democrats and 49% about the Conservatives. 36% felt the Conservatives would worsen the economy while 30% felt this way about Labour and 27% about the Liberal Democrats (See chart one overleaf).
Employment
73 % of people felt that Labour would have no impact or would improve UK employment. 65% felt this about the Liberal Democrats and 58% about the Conservatives. 30% believed the Conservatives would worsen prospects for UK employment, with Labour at 18% and Liberal Democrats at 17%. (Chart two).
Income
Here the picture is balanced, with 74% believing there would be no impact or their incomes would improve under the Conservatives, with Labour close behind on 73% and the Liberal Democrats at 72%.
Tax
People are more likely to think that tax will increase than think it will stay the same or go down, whichever party wins the election. Labour has a net balance of -48%, the Liberal Democrats -34% and the Conservatives -23%.
Commenting on the figures Stuart Bernau, Nationwide's executive director, said:
"Clearly, while people will vote on a range of issues, the economy and how consumers are feeling provide an important backdrop to the election and consumers are feeling relatively confident about the economy at the moment. Each party can take some positives away from our survey, however they should be warned; people are decidedly wary of politicians and especially with what they are planning to do with tax after the election."
