Use of English

Consumer Confidence

Consumer confidence is often described as a measure of how optimistic people feel (0) ABOUT the state of the economy and their own financial prospects. It tends to rise when employment is stable and inflation remains under control, conditions (1) .......... encourage households to spend rather than save excessively. Confidence can also be shaped (2) .......... headlines: if the media focuses on falling prices, factory closures or weak growth, people may become cautious even before such trends affect them directly. At the same time, confidence does not depend solely (3) .......... current income. Expectations about the future play an equally important role. If workers fear that interest rates will rise or that taxes may increase, they are less likely to commit (4) .......... major purchases. By contrast, when wages improve and borrowing remains affordable, consumers are more willing to take (5) .......... loans or spend on non-essential goods. Economists therefore pay close attention to confidence surveys, not because they predict behaviour perfectly, but because they often point (6) .......... changes in spending patterns before official data appears. A sudden drop in confidence may result (7) .......... reduced demand across several sectors. For that reason, governments and businesses alike monitor sentiment carefully in order to respond (8) .......... signs of weakening demand.