Consumer confidence has fallen in the UK, with people’s expectations for the economy and their own finances seeing a sudden drop.
The Consumer Confidence Index by GfK fell by three points to -14 in August, its lowest point since January, with decreases in all five categories:
- How has the financial situation of your household changed over the last 12 months: down two points to -1 (five lower than in August 2018)
- How do you expect the financial position of your household to change over the next 12 months: down five points to +2 (six lower than in August 2018)
- How do you think the general economic situation in this country has changed over the last 12 months: down two points to -34 (eight lower than in August 2018)
- How do you expect the general economic situation in this country to develop over the next 12 months: down six pints to -38 (12 lower than in August 2018)
- Is now the right time for people to make major purchases such as furniture or electrical goods: down three points to +1 (five lower than in August 2018)
Joe Staton, client strategy director at GfK, said: “Until Brexit leaves the front pages – whenever that will be – consumers can be forgiven for feeling nervous not just about the wider economy but also about their financial situation.
“That’s an important distinction because a significant development in August is the sudden drop in views on personal finances over the next 12 months after the encouraging jump in this measure last month.
“For a long time, the downward momentum in the Overall Index Score has been associated with our views on economy.
“But reduced confidence is now affecting how we see our personal finances.
“If there is a continuation of that dip in our feelings about our ‘future wallets’, we’d quickly see a headline score (the average of our five sub-measures) crash to a level that approaches the worrying figures seen in the worst days of the 2008/2009 financial crisis.
“We are not there yet, and we may not necessarily get there, but it’s a trend we need to watch carefully.”
GfK (Growth From Knowledge) compiles the Consumer Confidence Index on behalf of the European Commission and similar studies are done in other European Union countries.
The data, which is not seasonally adjusted, draws on the responses of 2,000 people during the first half of August, with quotas imposed on age, sex, region and social class to make sure the overall figures are representative of the UK population.