Nationwide: Consumers wary of eating into savings accounts

Consumer confidence went back to a subdued level in June, figures show.

Many consumers may be worried about using funds from their savings accounts in order to get by.

Mark Saddleton, head of economic and market analysis at Nationwide, made the claim following the organisation's Consumer Confidence Index for June 2011.

It discovered the levels had dropped to a subdued standard last month, following a "substantial uptick" of 11 points in May.

Mr Saddleton suggests this shows that consumers lack spending power due to their challenging financial circumstances.

The fall in sentiment regarding major or household purchases is hardly surprising, he states, adding: "Consumers are feeling wary of taking on more debt or eating into their savings for big-ticket purchases."

Current account holders may also be suffering, as Mr Saddleton explains the weakness in spending power could mean that prices on the high street face pressure to decrease.

Justin Modray from online resource Candid Money recently discussed finance options such as credit cards and said banks and building societies have become "more discerning" when approving such options for their customers, following the economic downturn.

By Mark Hornby