British Consumer Confidence Held at a Four-Year Low in August

By Jennifer Ryan

Sept. 3 (Bloomberg) -- British consumer confidence held at the lowest level in at least four years in August after economic growth stalled, Nationwide Building Society said.

An index of sentiment taken from the responses of 1,000 people in a survey stayed at 52, the same as in July, which was the lowest since the survey began in May 2004, the U.K.'s second- biggest mortgage lender said in a statement today.

Prime Minister Gordon Brown's government suspended a tax on some home purchases and pledged to accelerate 1 billion pounds ($1.8 billion) of spending yesterday to help reverse the housing slump. The fastest inflation in at least a decade will prevent the Bank of England from bolstering the economy by cutting interest rates tomorrow, economists say.

``Economic uncertainty continues to affect sentiment around spending and employment,'' Fionnuala Earley, Nationwide's chief economist, said in the statement. ``It seems that consumers are beginning to take a more realistic view of the future and are factoring in the possibility of tougher times ahead.''

Sixty-five percent of those questioned said the current economic situation worsened in August, up from 61 percent in July, Nationwide said. Forty-seven percent of people surveyed think there will be few jobs available in six months' time, up from 42 percent in July, the report showed.

Job Placements

The number of workers placed in permanent jobs fell the most since November 2001 last month, a separate report today by the Recruitment and Employment Confederation and KPMG showed. Their index of permanent placements fell to 41.5 from 44.1 in July, according to an e-mailed statement.

Brown's government yesterday introduced measures to tackle the worst slump in residential property values in almost two decades. Chancellor of the Exchequer Alistair Darling said the tax plans would help half of all homebuyers.

``We face a unique set of circumstances that we have not seen in a generation,'' Darling said in an interview broadcast yesterday on U.K. television channels. ``I remain optimistic that we can get through it. We will get through it.''

Britain's economy stalled in the second quarter, ending the nation's longest stretch of expansion in more than a century. The Organization for Economic Cooperation and Development yesterday cut its forecast for U.K. economic growth to reflect the deterioration in the housing market.

The Bank of England has kept the benchmark interest rate at 5 percent since April to control inflation, which accelerated to 4.4 percent in July, more than double the 2 percent target. The bank's panel will probably keep the rate unchanged tomorrow, according to all 61 economists in a Bloomberg News survey.

To contact the reporter on this story: Jennifer Ryan in London at Jryan13@bloomberg.net