Consumer confidence to hold firm

CONSUMERS will continue to spend next year despite increased interest rates and hikes in utility bills squeezing household budgets.

Nationwide‘s Consumer Confidence report found that 60% of consumers expect 2005 to be a better year for their finances than the past 12 months, with nearly three-quarters expecting the economy to improve during the year.

Despite interest rate hikes and subdued take-home pay, consumers‘ confidence in their financial position is holding up, with confidence in the housing market improving from August.

The company has already said it expects house prices to rise by 2% in 2005.

Nationwide predicts a slight slowdown in consumer spending next year, but not to the extent many commentators are predicting.

Nationwide executive director Stuart Bernau said: ?Consumers are looking forward to 2005 with confidence in their economic prospects and they have a determined list of financial New Years resolutions.

?The economic fundamentals are still good and there is no reason why consumer confidence levels shouldn‘t remain strong.‘

Looking at spending plans for next year, 10% are planning to trade up in the housing market, 12% intend to purchase a new car and a third expect to spend more on their holiday than they did in 2004.