Why are consumers so mixed in their views on the future?
If anything, the last six months has shown how difficult it is to forecast the future direction of the UK economy with any certainty. Consumer spending has on the whole fallen sharply over the last few months yet there were pockets when it appeared a recovery may just be around the corner. However, today's survey from the CBI suggests that the UK high street is again suffering from a slump in sales and there are fears of more bankruptcies and companies going out of business.
It seems as though consumers, and investors alike, are concerned about the mixed headlines in the press regarding potential green shoots of recovery and then more downbeat statements suggesting that the banking system is still in trouble. There is also significant concern that UK unemployment could power through 2 million in the short term and possibly peak at just over 3.2 million. This would cause a severe drag on any potential recovery in the short to medium term and also affect consumer confidence and ultimately consumer spending.
Confidence is the key to the recovery of the UK economy although when it will improve remains to be seen.
Share this..
Related stories
Massive mutual merger confirmed for August
The merger between Britannia Building Society and the Co-operative is set to be completed on 1 August after members from both parties voted in favour of the deal. This will see a combined group boasting 9 million customers, 12,000 employees and over £70 billion of assets. The new operation will also have a branch network of over 300 and has the potential to attack and damage more traditional UK b...
Read MoreWill a General Election call take the focus off the economy?
As the momentum from voters for an immediate general election continues to strengthen there are concerns that the UK economy could suffer from a potential period of inactivity at a time when assistance and funding is essential. The MP's expenses scandal continues to roll on and has impacted upon for voter's confidence in the UK political system, hence the call by more than 60% of the UK voting pub...
Read MoreRetail figures called into question yet again
The last few weeks have seen a slight improvement in some trading announcements from various retail companies throughout the UK. However, a report by the CBI today has highlighted the fact that 63% of their retail members are reporting reduced sales in the early stages of 2009. While there has been a slight increase in the confidence level compared to December 2008 it looks as though life on the h...
Read MoreThe Treasury set to take larger role in UK regulation
It appears that the secret as to why ongoing UK banking regulation changes were postponed this week is out of the bag. Rumours circulate the market suggest that the Bank of England and the Financial Services Authority (FSA) will be stripped of significant power in the regulatory market which will be transferred to the Treasury.
This is a significant U-turn by the UK government and o...
HSBC announces £12.5 billion rights issue and job cuts
HSBC has this morning confirmed a £12.5 billion rights issue and the loss of 1200 jobs in the UK. While this comes as no surprise to those in the industry it is a further blow for the UK job market as more and more observers forecast significant job cuts in the future. The 1200 jobs at risk will be spread amongst the company's operations in the UK as it seems there is no hiding place from the ong...
Read More