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Friday, July 29, 2011

UK Consumer confidence drops back towards 2-year low

Consumer sentiment fell back in July towards the two-year low seen earlier this year, a survey showed on Friday, fuelling concerns that cash-strapped consumers will continue to cut back spending and hamper the fragile economic recovery.

The Gfk NOP consumer confidence index dropped five points to -30, almost matching the two-year low of -31 hit in April, as the one-off boost from the festivities and the extra holiday for the royal wedding faded.

Economists had only expected a dip to -27.

"What will concern the government most is that the biggest drop of nine points was in people's expectations of the performance of the economy over the next 12 months," said Nick Moon, managing director of GfK NOP social research.

"When combined with people's pessimistic expectations for their own finances over the next year, retailers can expect tough conditions to persist for a while yet -- threatening an already fragile recovery." (more)