Consumer confidence in the UK has hit an all-time low, according to a new survey. It is now at its lowest level since 1974.
The GfK NOP Consumer Confidence, published today (July 31) shows that the overall index score dropped five points in July to -39, which is 33 points lower than this time last year.
The survey reveals that consumers are pessimistic about their personal financial situations, which has dropped nine points to -18, and the general economic situation, which is down seven points to -52. The score for confidence in personal finance is at its lowest level since 1994, while the score for the general economic situation has never before reached today’s depths.
The score recorded for consumers’ views on the climate for major purchases has also hit an all-time low, falling two points to -37, 35 points lower than July 2007.
The score for the saving index, an indicator of whether consumers think the time is right for saving, remains positive at 20, but this has dropped two points this month and is 22 points lower than last year.
Donna Culverwell, spokeswoman for the GfK NOP Consumer Confidence team, says that consumer confidence is four points lower than in March 1990, when the UK was in the midst of the last recession.
She adds: “With the cost of living still on the increase, the housing market in a depression and reports of possible further increases in energy prices, levels of confidence among consumers are not surprisingly low. There seems to be little sign of any relief either; with the growing spectre of the UK going into recession, people are pessimistic and concerned about their future – reflected in the biggest drop this month being seen in people’s confidence in their own personal financial situation over the coming 12 months.”
In a separate survey, also conducted in July, GfK NOP discovered that UK consumers are spending less on groceries, leisure activities and holidays – 42% of respondents buy supermarket own brands and 28% say they now shop at discount stores. Pubs and restaurants are also expected to see a downturn in custom, with 41% of those surveyed saying they are going out less. People are choosing to stay at home when it comes to holidays, too, with 38% saying they are planning less trips in the future.
The Consumer Behaviour Monitor also revealed the impact of rising oil costs on transport methods. Half of respondents said they were making less car journeys and 21% use public transport as an alternative.