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UK consumer confidence up, lending down


UK consumer confidence up, lending down


British consumer confidence unexpectedly improved in August, but the survey’s compilers said that merely reversed a large drop in July.

Planned big government spending cuts and uncertainty over the economic recovery has weighed heavily on the consumer mood this year.

At the same time, figures were released which showed net lending to British households unexpectedly fell to a four-month low last month.

There was a sharp decline in mortgage lending; it fell to 86 million pounds in July from 518 million pounds in June.

That reinforced economists’ concerns that tight credit conditions may hamper future growth in the UK.

Analysts said a small rise in the number of mortgages approved would not be enough to stop continued housing market weakness, with knock-on effects for consumer spending.

Many economists are worried that Britain’s economy may slow sharply next year, due to weakening growth in export markets and looming cuts of around a quarter to the budgets of most government departments.

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