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Emergency Budget hits consumer confidence

Emergency Budget hits consumer confidence

Category: Economy

Updated: 30/06/2010
First Published: 30/06/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The new coalition Government's emergency Budget has hit consumer confidence, new figures show.

Last week's announcement to the House of Commons was designed to drive the economy back in the right direction, but it doesn't appear to have appeased the public.

Data from GfK NOP has revealed that confidence fell for the fourth month in a row during June, while sentiment on the economic situation over the next 12 months also worsened.

People are also less prepared to purchase big ticker items, while England's World Cup exit has also put a dampener on hopes that a spending spree will help boost the UK's economy.

"The ongoing debate around spending cuts and speculation around tax hikes in the lead up to the emergency Budget has done nothing to improve consumer confidence, which has continued to fall so that all the gains from December to February are now lost," Nick Moon, managing director of GfK NOP social research, commented.

"Concerns about the fragility of the recovery and the potential for a double-dip recession may be exacerbated by the fall in confidence in the general economy.

"The outlook for major purchases has also dropped, which suggests the Government cannot rely on consumers to fuel growth."

The financial situation does seem to have made people more aware of the importance of saving, with figures showing that more consumers are trying to put some money aside.

Those looking to build up a nice little nest egg may want to run the rule over long term fixed rate bonds, such as the 4.75% offered by ICICI Bank on its five year fixed rate bond.

However, if you are looking for a shorter term commitment, Santander, Barnsley BS and ICICI Bank all offer one year fixed rate bonds paying a return of 3% or even higher.

Find the best savings rates for you - Compare savings accounts

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