Consumer confidence slips to lowest level since 1970s

Consumer confidence in the UK has slid to its lowest level since comparable records began almost 50 years ago as the rising cost of living stokes concerns over people’s personal finances and the country’s economic prospects.

According to the latest figures from GfK’s Consumer Confidence Index, the overall score in August has slipped by three points to -44‒ the lowest reading since equivalent data was first published in 1974.

All five measures used to create the score were down in comparison to last month’s reading.

The decline in consumer confidence reflects a darkening mood across the UK economy, with consumer inflation hitting double-digits, the largest drop in real wages for more than 20 years, a resurgence of labour strikes, mounting pressures across public services and warnings of recession.

Earlier this month, the Bank of England warned that the economy was likely to slide into a recession lasting more than a year as households struggle to pay energy bills, which are expected to jump even higher in October.

Commenting on the consumer confidence data, Joe Staton, a director at GfK, said: “A sense of exasperation about the UK’s economy is the biggest driver of these findings.”

He added: “These findings point to a sense of capitulation, of financial events moving far beyond the control of ordinary people. With headline after headline revealing record inflation eroding household buying power, the strain on the personal finances of many in the UK is alarming. Just making ends meet has become a nightmare, and the crisis of confidence will only worsen with the darkening days of autumn and the colder months of winter.”

ONS data released on Friday (19) showed that retail sales in the UK edged up in July, although the longer-term downward trend in consumer spending showed no sign of abating as the cost-of-living crisis worsened.