1:00PM New York, 6:00PM London - U.K. consumer confidence falls to the lowest in three years but income expectations remain high. Liberty International in talks to merge with its rivals.

Stocks in London snapped six days of losses on reports that Liberty International is in talks with a bigger rival to form the world’s largest shopping mall.

Market Sentiment

In London trading FTSE 100 stocks increased 1.49% or 85.5 to 5,853.50. Of the FTSE 100 stocks 85 gained, 15 declined and 2 were unchanged.

Liberty International led advancers in the FTSE 100 stocks with a rise of 9.23% after the Independent reported today that the company is in talks with a rival to establish the world’s largest shopping mall company.

Consumer Confidence Slumps

Nationwide reported on its web site today that the Nationwide Consumer Confidence Index fell by three points to 78 in February driven mainly by weakened confidence in the current economic situation.

The Present Situation Index, which gauges how consumers feel about the current economic and employment situation, declined from 83 in January to 76 in February on a reversal in sentiment about current economic conditions.

Also, the proportion of consumers thinking that current economic conditions are bad has risen from a quarter to a third. But consumers’ feelings about the current job situation remain unchanged on the month.

The Expectations Index, which measures consumers’ feelings about the economic and employment situation and their income in the next six months, was static at 79.

The Spending Index, which reflects consumers’ willingness to spend, declined four points to 64 in February. Only 11% - 23% lower than last year- of consumers are confident that now is a good time to make such a purchase.

The index has been below 70 since November 2007, coinciding with the rising price of credit.

However, consumers are positive about employment despite economic uncertainty. Over 53% believe there are some or many jobs available at present and over one third or 39% think this will also be the case in six months time. Despite the economic uncertainty, 87% think that their household income will be the same or better in six month’s time.

Consumers hold up on major purchases

According to the Nationwide survey, only 11% of consumers are confident that now is a good time to make such a purchase major items.

In addition, consumers expect house prices to fall by 1.1% over the coming six months from slump of 0.2% in January.

Liberty International in merger talks

The Independent news online reported that Liberty International is in merger talks with a major rival to build the world''s largest shopping mall group. Australia''s Westfield Group and GIC Real Estate, the property arm of Singapore''s sovereign wealth fund, are named as the potential suitors.

Currently, Liberty has a market value of £3.41billion and property investments of £8.6 billion, of which UK regional shopping centres comprise 75%.

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