Page last updated at 00:01 GMT, Wednesday, 4 March 2009

UK consumer confidence 'climbs'

Shoppers on London's Oxford Street last month
Only 16% think that it is is a bad moment to buy goods like fridges

Confidence among UK consumers rose moderately in February despite the weakening economic conditions, according to the Nationwide.

Its Consumer Confidence Index rose by 2 points to 43 in February, recording its first rise since last October.

The survey of 1,000 consumers showed that they became more optimistic about the future economic conditions.

At the same time, confidence in the present situation fell for the eighth consecutive month in February.

"The spate of bad economic news and reported job losses in major industries may have dampened consumers' perceptions of where we are now," the report said.

Nationwide's Present Situation Index declined to 22 points in February from 24 in January, while its Expectations Index rose to 57 from 52 and its Spending Index increased to 92 from 85 points.

'Encouraging'

Consumers' views about the current economic and labour market conditions are in line with the recessionary climate in the UK
Fionnuala Earley, Nationwide

Meanwhile, only 16% of consumers think that now is a bad moment to buy goods like fridges and hi-fis, which could be a result of the significant discounts available, the Nationwide said.

"In addition, more consumers think it's a good time to make a major purchase. Falling house prices and bigger discounts on new cars may well have affected this, but it remains to be seen how quickly this sentiment will lead to larger numbers of transactions given the current economic conditions," it said.

The CBI business organisation said last week that retail sales had fallen in February, but the rate of decline had slowed.

According to official figures, UK retail sales rose 0.7% in January compared with December, and by 3.6% compared with January 2008 due to big price cuts.

Fionnuala Earley, Nationwide's chief economist, said: "Consumers' views about the current economic and labour market conditions are in line with the recessionary climate in the UK.

"However, their increased optimism about the future is encouraging."

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