Interest Rate Rise Affects Consumer Confidence

Last month's involvement charge per unit rise is beginning to impact consumer confidence, it have been revealed.

According to figs released by GfK NOP, the Consumer Assurance Index mark dropped by a point over the course of study of June to stand up at -3. The autumn was attributed to the determination by the Depository Financial Institution of England's pecuniary policy commission (MPC) to increase the alkali charge per unit to 5.5 per cent, which could impact upon borrowers' ability to do secured loan repayments.

Rachael Joy, consumer assurance representative for GfK NOP, said: "After an eventful May, this calendar month sees the higher involvement rates taking effect. Consumers have got a more than negative feeling of the general economical state of affairs with a six-point drop this month. Whilst at the same time, consumers are also taking advantage of the state of affairs and the 'now is a good clip to save' index have increased this calendar month and now stand ups at its peak degree in recent years."

Figures from the marketplace research company also indicated that Britons are in a record temper to salvage money. In a move which could see them offsetting debt direction and loan payment difficulties, the index for those thought "now is a good clip to save" rose by one to +36, the peak degree GfK NOP claimed to have got recorded in recent years. This figure was also reported to be four points higher than the mark for last June.

Meanwhile, Britons' positions towards their personal finances were said to have got remained unchanged this month. The index recording consumers' position of their pecuniary state of affairs over the past 12 calendar months was reported to be +3 - the same figure recorded in May. Opinions about personal finance during the extroverted twelvemonth had also remained consistent, remaining at +13, a mark which was also noted in June 2006. The survey also indicated that tendency for making major purchases rose throughout June to +6. However, this stands for a five point driblet compared with the same clip last year.

Overall, consumers' positions about the British economic system over the past 12 calendar months were said to have got seen "the greatest change" throughout the course of study of June. GfK NOP study that the index have fallen by some six points to a mark of -24. Meanwhile, mentality about the general pecuniary state of affairs was noted to have got stayed at the May figure of -10. However, this was some eight points higher from the same survey carried out in June last year.

However, according to a survey released by fiscal charity Recognition Action there is a deficit of nest egg among Britons. Just over one in four (27 per cent) consumers are said to not have got any money set aside, with a additional 25 per cent retention nest egg of less than £3,000. Meanwhile, some three million Britons declare themselves to be "frivolous spenders", as their determinations to buy are based what they desire instead of what they can afford"frivolous spenders", as they do up one's mind to make purchases based on desirableness instead of affordability. Overall, two out of three was said to subscribe to 'the bargain now, believe later culture' which may consequently see them battle to do loan repayments.