BC-EU--Britain-Economy, 1st Ld-Writethru,0336
UK consumer confidence up in January
LONDON (AP) -- Consumer confidence rose in January in the United Kingdom although households' inclination to spend fell somewhat, a bank survey said Wednesday, while a separate report showed the recovery in the services sector stalled, in part due to unusually heavy snowfall.
Both reports underlined the difficulty of Britain's recovery from recession following a feeble return to growth in the fourth quarter.
The Nationwide Building Society said its confidence index was up three points to 73, nearly double the level a year ago, when Britain was sliding deeper into recession. January's figure reversed a decline in confidence in December.
The index measuring confidence in spending fell from 108 in December to 96 in January.
As a measure of the depth of British gloom, the bank's finding that 69 percent of respondents thought the economy was in bad shape represented an improvement over recent months.
Britain's recession officially ended in the fourth quarter when the economy grew by just 0.1 percent.
"Positive signs from the manufacturing sector and labor market may have helped boost confidence during January, but confidence is likely to remain fragile for some months to come," said Martin Gahbauer, Nationwide's chief economist.
Meanwhile, the Chartered Institute of Purchasing and Supply's monthly survey of the services sector said its index fell to 54.5 in January, the lowest level in five months and down from 56.8 in December. Anything above 50 indicates growth.
"A slightly downbeat start to the year for the services sector. This may be a temporary blip caused by one-off events rather than signs of a double-dip recession, but we can't dismiss the possibility," said David Noble, the institute's chief executive.
Economist Vicky Redwood said the survey, combined with earlier measures of construction and manufacturing, were still consistent with achieving growth of 0.5 percent in the first quarter.
"We continue to think that the economy will struggle to grow by much more than 1 percent this year," Redwood said.
