British consumer confidence slips to lowest level in 6 months, pointing to cooling growth

Shoppers walking along a wet pavement on Regent Street in London on Aug 19.
Shoppers walking along a wet pavement on Regent Street in London on Aug 19. PHOTO: BLOOMBERG

LONDON (REUTERS) - British consumer morale has slipped to its lowest level in six months and growth among services companies cooled, according to two surveys that suggested to a further moderation of economic growth.

Market research firm GfK said its monthly consumer sentiment indicator dipped to +1 in November from +2 in October, bucking economists' forecasts for it to hold steady.

Optimism about the economy over the next 12 months dipped to its lowest level since July 2013, although the survey showed consumers still had a healthy appetite for splashing out on major purchases.

A separate report from the Confederation of British Industry showed growth of business volumes in the services sector - which makes up more than three-quarters of Britain's private sector economy - eased in the three months to November.

Taken together, the surveys added to mixed signals about economic growth in the final few months of 2015. Britain was the world's fastest-growing big, developed economy last year. But some other business surveys have suggested the pace of expansion has moderated as uncertainty grows about the global outlook.

Official data due later on Friday are expected to confirm the economy grew 0.5 percent in the third quarter, slowing from 0.7 percent in the second quarter.

"Despite the good news agenda of rock-bottom inflation, falling fuel prices and higher wage growth boosting spending power, confidence appears to be depressed by a combination of wider economic, political and social events," Joe Staton, head of market dynamics at GfK, said, without elaborating.

The CBI survey showed consumer services like hotels, bars and restaurants saw steady and strong growth, but the pace of expansion among business and professional services companies ebbed to its lowest level since 2013.

Next week sees the release of closely watched purchasing managers' indexes, which will provide another gauge of the economy's health going into 2016.