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Consumer confidence at lowest point since records began

Shoppers in Princes Street, Edinburgh (PA)
Shoppers in Princes Street, Edinburgh (PA)

Consumer confidence is now weaker than at its lowest point during the global banking crisis or the Covid shutdown as cost of living pressures escalate, according to a long-running survey.

GfK’s Consumer Confidence Index fell two points to minus 40 in May, its lowest score since records began in 1974.

It 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 soaring food and fuel bills.

Pessimism is starkest in relation to the general economy, with consumer confidence falling to minus 63 looking back over the past year and minus 56 for the 12 months.

The major purchase index, an indicator of confidence in buying big ticket items, has now fallen for six months to minus 35, reflecting the latest “dismal” set of retail sales figures, GfK said.

Confidence in personal finances over the past 12 months fell three points to minus 22 – 18 points worse than this time last year.

GfK client strategy director Joe Staton said: “May’s result is one point lower than the previous record set in July 2008 when the headline score plunged to minus 39.

“This means consumer confidence is now weaker than in the darkest days of the global banking crisis, the impact of Brexit on the economy, or the Covid shutdown.

“The outlook for consumer confidence is gloomy, and nothing on the economic horizon shows a reason for optimism any time soon.”

Linda Ellett, UK head of retail and leisure consumer markets at KPMG, said: “The cost-of-living squeeze is, of course, feeling tighter for some consumers than others. Among those we’ve surveyed, one third of consumers that started 2022 with savings are dipping into them to help meet their monthly essential costs.

“But two-thirds of consumers with savings still plan to spend some on the things that they want in 2022. It’s looking vital for the high street that in the coming months this group remain willing and able to spend.”