- Consumer confidence slid 2 points this month, according to a survey by GfK
- UK shoppers reported growing gloominess around the general economy
- The fall comes despite a strong jobs market and low interest rates
UK shoppers are on a ‘path of self-imposed austerity’ ahead of Brexit, a market research firm said today, as consumer confidence tumbled in June.
GfK’s long-running consumer confidence index fell two points overall to -9 this month as Britons reported a marked deterioration in their optimism about the economy.
Sentiment towards the general economic situation over the last year fell four points to -28, three points lower than it was a year ago, and expectations for the coming year also fell four points to -25.
Shoppers are holding back from splashing out on big ticket items, according to GfK
June’s slide follows a short-lived rebound in April and May when shoppers appeared to be feeling better about spending, which was reflected in some stronger retail sales.
This month, however, confidence in personal finances over the last year fell one point and the forecast for the coming year fell by two points.
And, in another blow to the troubled High Street, the major purchase index – an indicator of confidence in buying big ticket items such as furniture – also fell, by one point to zero.
‘When will the strong jobs market and low interest rates boost the economic mood?’ asked GfK client strategy director Joe Staton.
‘Meanwhile, with Britain’s hard-pressed retail sector very much in the news, there is little comfort in the one-point drop to zero in the major purchase index.
UK consumer confidence has been in negative territory for 30 months
‘Shoppers are holding on to their cash and consumers in general seem set on their path of self-imposed austerity,’ he said.
The overall index score has now registered at zero or negative for 30 months compared with 2015 when there was a full year of positive numbers.
‘The trend since those 2015 figures has been resolutely downwards and it’s difficult to see the direction changing in the run-up to the UK leaving the European Union in March 2019,’ Staton added.
The figures follow Bank of England’s chief economist Andy Haldane’s comments that World Cup cheer is boosting consumer spending, which could in turn support the case for an interest rates rise.