Consumer Confidence Remains Steady in February

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By Jerin Mathew | February 28, 2013 4:16 PM EST

Consumer confidence remains same in February

Consumer confidence in the UK remained unchanged in February with optimism about personal finances rising to the highest level in about two years, according to a survey by GfK NOP.

GfK's sentiment index remained steady at minus 26 in February, after increasing by 3 points in January. Economists were expecting consumer confidence to worsen to minus 27.

In the index, a reading above zero indicates optimism, while a negative reading indicates pessimism.

"The maintenance of all of last month's three-point gain is encouraging," said Nick Moon, managing director of social research at GfK.

"Consumers may be regaining their breath before moving on to a new base camp in the ascent towards the -9 that is the overall average of the index across its almost 40-year life."

GfK's measure of personal finances rose 2 points to the highest level since May 2011 at minus 5, while a gauge of optimism about major purchases declined 4 points to minus 26.

A measure of consumers' economic outlook over the next 12 months was unchanged at minus 25 in February, but they were less confident about 2012, with the index shedding 1 point to minus 52.

The British economy is expected to experience a slow recovery in 2013, but rising energy bills and accelerating inflation amid widened austerity measures are hurting consumers.

On 27 February, the Office for National Statistics' more detailed release of UK economic output showed gross domestic product contracted 0.3 percent in the fourth quarter of 2012, unchanged from the preliminary calculation released in January.

Last week, credit rating agency Moody's Investors Service downgraded the country by one notch to Aa1 due to slower than expected economic growth, a rising budget deficit and higher overall borrowing by the Conservative-led coalition government.

Though the country is expected to avoid an unprecedented triple-dip recession, lack of government infrastructure projects would hurt economic expansion as private-sector firms remain cautious over their spending and investment plans.

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