Consumer confidence falls three points

Consumer confidence has fallen by three points, according to the latest Nationwide index, with the current credit crunch having an effect.

During February the index fell from 81 to 78, due mainly to weakened confidence in the present economic situation, Nationwide said.

The lender's Present Situation index revealed the biggest fall of the four indices, dropping from 83 in January to 76 last month, indicating a "sharp change in sentiment".

However consumers' opinions on the current employment situation remained about the same.

The Expectations index remained at 79 and the Spending index fell four points to 64.

Nationwide's senior economist Martin Gahbauer said: "The continued downward trend in consumer confidence is to be expected given the effect of higher food and fuel costs on people's pockets and the tightening of the availability of credit."

He suggested the effects of cuts to the base interest rate are yet to be seen, which could be bad news for credit card holders.

Meanwhile the British Bankers' Association has made calls for the government to take steps in the next Budget to restore confidence.

Chief executive Angela Knight said uncertainty over proposed tax changes was detrimental to UK business.

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