LONDON - Bloomberg
Consumer confidence in Britain declined to the lowest level since at least 2004 in June as inflation accelerated and the economic slowdown deepened, Nationwide Building Society said.
Nationwide's index of sentiment, taken from the responses of 1,000 people, declined 6 points to 63, the lowest since the survey began in May 2004, Britain's fourth-biggest mortgage lender said yesterday in a statement.
Britain is skirting a recession as house prices fall, banks roll back credit and oil costs increase. Bank of England Governor Mervyn King, who votes in an interest-rate decision today, has said that the inflation rate may jump to 4 percent, double the target, and that the economy may contract.
Consumers �are recognizing that the economy is weakening and that's going to affect them,� said Fionnuala Earley, chief economist at Nationwide, in an interview on Bloomberg Television. �The next move in rates will be down, but it will be much later this year or next year.�
All but one of 49 economists in a Bloomberg News survey predict the Bank of England will keep the key rate unchanged at 5 percent today. Nationwide said there is a 20 percent chance that the bank will raise interest rates.Inflation climbed to 3.3 percent in May, the fastest pace since at least 1997.