U.K. consumer confidence fell to a three-month low in July as Britons grew more pessimistic about the outlook for the economy, Nationwide Building Society said. An index of sentiment declined 2 points to 49 from June, the lowest reading since April, the Swindon, England-based customer-owned lender said in an e-mailed report today. A gauge of consumers’ future expectations for the economy in the next six months slipped 3 points to 67. Confidence may drop further after the U.K. had its worst rioting since the 1980s and concern about the European debt crisis and a cooling global economic recovery wiped trillions of dollars off equity markets, Nationwide said. The Bank of England kept its benchmark interest rate at a record low this month as the faltering recovery outweighed the risk of inflation. “With the economic recovery still facing strong headwinds, it is unlikely that we will see any considerable improvement in confidence in the remainder of 2011,” said Robert Gardner, Nationwide’s chief economist. “With consumers continuing to expect a fall in house prices over the next six months, it is perhaps unsurprising they are expressing reservations toward making substantial financial commitments at the present time.” Job Woes U.K. inflation is outpacing wage growth, putting pressure on household incomes at a time when government budget cuts are fueling concerns about rising unemployment. Britons’ pay growth was unchanged at 2.5 percent in the three months through July from the previous quarter, Incomes Data Services said today, while consumer-price gains were an annual 4.4 percent. A gauge of whether Britons think it’s a good time to buy household goods or make major purchases such as a car or a home fell 1 point to 73 in July, Nationwide said. A measure of their view of the current economic situation was unchanged at 23. Today’s report showed that Britons became more pessimistic about the housing market last month. They expect the value of their home to drop 0.4 percent in the following six months, compared with a prediction of a 0.3 percent decline in June. Nationwide questioned 1,000 people for the survey between June 27 and July 24. To contact the reporter on this story: Scott Hamilton in London at shamilton8@bloomberg.net To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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