GfK consumer confidence index paints gloomy picture of public economic mood
Onsumer confidence has plummeted to a record low with no “reason for optimization any time soon” as public concern over the cost of living crisis takes hold.
GfK’s bellwether consumer confidence index dropped two points to minus 40 in May, the lowest score since the survey began in 1974.
The fall came as inflation soared to a 40 year high and amid warnings from the Bank of England that the UK could be on the brink of recession.
Joe Staton, client strategy director at GfK, said: “The outlook for consumer confidence is gloomy, and nothing on the economic horizon shows a reason for optimization any time soon.”
The data is likely to pile more pressure on Chancellor Rishi Sunak to intervene and help struggling Brits with the cost of living crisis. Businesses are concerned that plummeting confidence could push the UK into recession as households rein in spending and save cash.
GfK found the public felt their personal financial situation had gotten worse in May and the index measuring changes in personal finances over the last 12 months decreased three points to minus 2.
Confidence in the economy also took a battering, down three points at minus 63.
Expectations for the general economic situation over the coming year dropped by one point to minus 56. The measure for those wanting to make a major purchase dropped three points to minus 35.
Staton said: “The GfK consumer confidence barometer recorded a headline score of minus 40 in May, the worst since our records began in 1974.
“This comes as UK unemployment hits a 50-year low with vacancies outnumbering job seekers for the first time, and inflation peaking at a 40-year high driven by souring food and fuel bills.”
On Wednesday, US stock markets suffered their sharpest fall in two years after major retailers Target and Walmart reported weak earnings. That sparked fears of a slowdown in consumer spending.
Earlier this month Bank of America said its survey of UK consumers found shoppers were looking to rein in spending on clothing and eating out, “especially consumers with below average income.”
Credit: www.standard.co.uk /