The Nationwide consumer confidence index nudged down to 100 from 101 in August, the lender said yesterday.

Sentiment was improved by August’s interest rate cut and the consumer house price forecast rose, the report said.

Nationwide, who in partnership with TNS produces the index, said that after a gloomy early summer, which saw a large drop in sentiment, confidence had stabilised at a more positive level. The index remained broadly stable in August at 100, compared to 101 in July, much stronger than 95 in June.

Behind the consumer confidence index lies an interesting trend: consumers’ current confidence fell whilst sentiment about the future recovered. The present situation index fell in August from 104 to 99, whilst the expectations index rose from 99 to 101. Consumers appear to be uncertain about the current state of affairs but increasingly confident about the future.

Stuart Bernau, Nationwide executive director, said: "With only a marginal reduction in August, consumer confidence appears to have stabilised. Consumers’ fears about the future, which pushed the index down in May and June, faded in July causing a rebound. August saw confidence level-out."

"The figures illustrate that whilst consumers are uncertain about the current economic situation, they have become more positive about how the future will unfold. August’s rate cut appears to have boosted sentiment and it will be interesting to see how they behave over the coming months."

Impact of MPC on confidence

The base rate cut on 4 August seems to have had a significantly positive impact on confidence, in particular by boosting consumers’ expectations about the future.

In the fortnight prior to the rate cut the headline index stood at 98, but after the cut confidence rose to 101.

The biggest area of uncertainty shown in the index surrounds employment. In August, the number of people thinking that there are currently "many/some" jobs available fell by 7% to 56% - its lowest level since Nationwide started measuring consumer confidence.

Confidence in the number of jobs available in the future has also fallen. Only 47% believe jobs will be available in the future (its second lowest level) while 25% believe there will be few jobs available.