The debt-laden clouds hanging over Europe darkened in August as politicians waver over solutions and financial markets sold off amid the uncertainty. At home, inner city riots and a rise in unemployment added to deepening pessimism.
Household finances showed an improvement in August with more saving households. Spending confidence continues to be very weak. Unemployment expectations worsened for the second successive month although inflation expectations were better. Improving job expectations were a feature of the early part of 2011 but this trend appears to have stalled.
Around the UK…..
Confidence in August was more volatile across several UK regions. In London the measure slumped 7 points to –29 and is 20 points lower than a year ago. The inner city riots are a likely reason for the slump. In 3 regions confidence picked up - in Northern Ireland, Scotland and the Midlands. In the North confidence is down for the third successive month, and is lowest in the North West (-36).