U.K. Consumer Confidence Stays Close to Lowest Since 2004

By Jennifer Ryan

March 4 (Bloomberg) -- U.K. consumer confidence stayed close to the lowest level in at least four years in February as the recession persisted and companies cut jobs, Nationwide Building Society said.

An index of sentiment rose to 43 from 41 the previous month, which was the worst result since data began in 2004, the mortgage lender said in a statement today. The reading was taken from a survey of 1,000 people from Jan. 19 to Feb. 15.

The Bank of England may cut the key interest rate to a record low of 0.5 percent tomorrow and take steps to start printing money to ease the flow of credit. Prime Minister Gordon Brown has also given banks loan guarantees and pushed them to make more finance available to help the economy weather its worst slump in three decades.

“Consumers’ views about the current economic and labor market conditions are in line with the recessionary climate in the U.K,” Fionnuala Earley, chief economist at Nationwide, said in the statement.

The confidence gauge still rose on the month for the first time since October, Nationwide said. A measure of attitudes on buying household goods and making major purchases rose seven points to 92, the highest since October 2006, while an index on expectations for the future increased 5 points to 57. The gauge of attitudes on the present situation fell 2 points to 22.

Job Placements

The number of U.K. workers placed in permanent jobs fell at close to the fastest pace since 1997 last month, the Recruitment and Employment Confederation and KPMG said. An index of permanent placements fell to 30.3 from 32.5 in January, the groups said in an e-mailed statement today.

Meggitt Plc, the U.K. maker of engine monitors for Airbus SAS and Boeing Co. planes, said yesterday it may cut as many as 750 jobs to help generate savings of 50 million pounds ($70 million) amid the global economic slump.

The U.K. economy contracted 1.5 percent in the fourth quarter, the most since 1980, as consumers cut spending. Brown’s government last month ordered Northern Rock Plc, the nationalized bank, to expand lending to help the economy. Ministers also agreed to guarantee 325 billion pounds of Royal Bank of Scotland Group Plc’s investments.

Chancellor of the Exchequer Alistair Darling suggested in a newspaper interview published yesterday that the Bank of England could start printing money as soon as this week, as interest rates lose their ability to revive growth.

Policy makers may lower the key rate by a half point to the lowest since the bank was founded in 1694, according to the median forecast of 60 economists in a Bloomberg News survey.

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