U.K. consumer confidence fell to a 20-month low in November as the looming government budget squeeze dented Britons’ outlook for 2011, Nationwide Building Society said. The index of sentiment slipped 7 points from October to 45, the lowest since March 2009, the customer-owned lender said in an e-mailed report today. The gauge has now fallen for three consecutive months. The measure of consumers’ future expectations fell 9 points to 61, also a 20-month low. Prime Minister David Cameron’s drive to tackle the record budget deficit with the deepest spending cuts since World War II threatens to slow economic growth. The squeeze will eliminate 330,000 public-sector jobs and increase sales tax to 20 percent next year from its current level of 17.5 percent. “The strong rally in sentiment that took place from the middle of 2009 into the first quarter of this year has now been almost completely reversed,” Martin Gahbauer, chief economist at Swindon, England-based Nationwide, said in a statement. “The fall in confidence can largely be attributed to consumers growing increasingly cautious over the outlook.” An index of people’s current perception of the economy dropped 5 points to 21, while a gauge of whether now is a good time to spend slumped 13 points to 79, the report showed. TNS-RI questioned 1,000 people for Nationwide between Oct. 18 and Nov. 21. GfK NOP Ltd.’s consumer-confidence index fell in November to a four-month low, according to a Nov. 30 report. Sentiment Lag Weakening sentiment is “not uncommon in the early stages of a recovery” as improvements in the labor market often lag turnarounds in the wider economy, Gahbauer said. While jobless claims fell in November, unemployment measured by International Labour Organization methods rose by 35,000 to 2.5 million people in the quarter through October. The Chartered Institute of Personnel and Development said in a separate report that fewer British employees expect a pay raise next year as government workers grow more pessimistic about the future. Fifty-eight percent of the 3,000 respondents in a survey said they anticipate a wage increase in 2011, compared with a result of 67 percent last year, CIPD said. Meanwhile, a gauge of U.K. residential rents was little changed in November as increases in London offset declines in other areas of England. The average monthly rent for a home in England and Wales was 692 pounds ($1,079) last month, compared with 691 pounds in October, the Newcastle, England-based company said today. While London posted a 1.8 percent gain, rents fell by 3.1 percent in eastern England and 2.4 percent in the East Midlands. To contact the reporter on this story: Scott Hamilton in London at shamilton8@bloomberg.net To contact the editor responsible for this story: John Fraher at jfraher@bloomberg.net

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