Nationwide Building Society claims that mixed messages in the media is affecting consumer confidence.
Its research indicates that consumer confidence is at its lowest level since May 2004 which means that people are reluctant to spend money or take out loans.
Nationwide identified media coverage of the state of the economy and Hurricane Katrina’s effect on oil prices as some of the factors eroding consumer confidence.
The number of people who thought that the current state of the economy was good fell from 46 per cent to 44 per cent in September and the number of people who felt the economy was in a bad state rose by 2 per cent to 17 per cent.
Fionnuala Earley, Nationwide’s group economist, said: “Overall the index shows a general weakening in consumer confidence since the spring.
“While most people continue to have a positive view of the economy, this is waning as mixed pictures continue to emerge. On one hand, continued weakness in retail sales, while on the other a boost in the housing market.”
Nationwide found that people are concerned about the future given the mixed messages in the media. The building society predicts with 80 per cent certainty that interest rates will remain unchanged.
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