According to the latest data from GfK’s consumer confidence index, consumer confidence in the UK hit a new low in June 2022. The index fell by one point to reach -41, marking a second consecutive month of record lows. This downward trend is a cause for concern as it indicates a decline in consumer optimism about the state of the economy.
Within the index, several measures showed declines compared to May, with only one measure remaining unchanged. The index measuring changes in personal finances over the past year dropped one point to -23, showing a significant decline compared to June 2021. The forecast for personal finances in the next 12 months also dipped three points to -28, a staggering 39 points lower than the same period last year.
The measure for the UK’s general economic situation over the past year decreased by two points to -65, which is 18 points lower than June 2021. Expectations for the general economic situation in the coming year also dropped by one point to -57, a significant decline of 55 points compared to last year.
Even though the Major Purchase Index remained unchanged in June at -35, reflecting a 30-point drop compared to the same month last year, the Savings Index decreased by one point to +9, indicating a 12-point decline compared to June 2021. This suggests that consumers are being cautious with their spending and prioritizing saving in light of the uncertain economic conditions.
Joe Staton, Client Strategy Director at GfK, expressed surprise that the index did not drop even further. He attributed the current dark consumer mood to various factors, including rising prices outpacing wage growth, potential strikes, spiraling inflation, and the looming threat of a recession. Staton emphasized that consumers tend to tighten their purse strings during challenging times, and the current economic reality in Britain is undeniably stark.
The decline in consumer confidence reflects the ongoing struggle faced by shoppers, and it highlights the urgency for policymakers and businesses to address the pressing economic issues impacting households across the UK. It is crucial for measures to be implemented to support consumer confidence, boost household finances, and stimulate economic growth during this uncertain period.
Useful links related to the article:
1. BBC: UK consumer confidence falls for second month running
2. The Guardian: UK consumer confidence at record low in June, says index
