British consumer confidence picked up at the start of September before financial market turmoil wiped out those gains later in the month, a survey showed on Tuesday.

Researchers Gfk NOP said its consumer confidence index rose for a second straight month to -32 in September from -36 in August. Analysts had expected a reading of -39.

However, GfK then exceptionally conducted a second survey later in the month which showed the index erasing any improvement to remain steady at -36.

“I’d say we’re seeing a tentative lift in UK consumer confidence, although we’re still at the levels not seen since the 1990s recession,” said Rachael Joy, at GfK NOP.

The figures are unlikely to alter expectations that the Bank of England will cut interest rates from 5 percent in the coming months as the economy edges towards its first recession since the early 1990s.

Some economists say the credit crisis, which deepened this month and claimed more victims in the banking sector, has raised the chances of a British rate cut as early as next week.

Public attitudes to the general economic situation in the next 12 months actually picked up as September progressed, according to the GfK NOP survey.

That index rose to -40 in the initial reading for September from -47 in August and then picked up again to -38 in the later survey which incorporated results obtained between Sept. 19-21.

Those results would have incorporated some flavour of the public mood after the rescue takeover of Britain’s biggest mortgage lender HBOS by rival Lloyds TSB.

“The indication is that people are coming to terms with the thought of living through a depression,” Joy said.

“While they are still nervous of their personal financial situation and the economy in general, we could be seeing the start of people acclimatising to the situation.”

The index measuring personal finances over the next 12 months rose slightly at the start of September before slipping back to -12, the same as in August.

And the climate for major purchases improved by 6 points in the first part of the month before falling back to August’s level at -38.

Source: http://www.afxnews.com

Related Content