In spite of the summer heatwave and success of the England team at the FIFA World Cup, UK consumer confidence declined still further in July, meaning it hasn’t been in positive territory since February 2016.
Concerns about personal finances, the general economic outlook and Brexit have played a key role in the long-term slump, with overall confidence decreasing one point to -10 in July, according to GfK’s Consumer Confidence Index.
The index measuring changes in personal finances during the last 12 months increased one point to +1; however, the forecast for personal finances over the next 12 months decreased one point to +5.
The measure for the general economic situation of the country over the last year remains unchanged at -28. Expectations for the economy over the next 12 months, however, have decreased one point to -26.
Joe Staton, client strategy director at GfK, says there’s “enormous scope” for volatility in consumer mood over the coming months – “simply because the tranquillity and predictability consumers prefer is put beyond their reach by the likelihood of many months yet of nagging uncertainty.”
As such, Staton says the overall index score could easily slide lower and there’s a hint that it might.
There’s bad news for retailers too as consumers continue to spend less and save more. The major purchase index dropped two points to -2 in July, while the savings index was up one point to +9 for the third consecutive month. Savings intentions are also four points higher than this time last year.
“When people begin to nurse concerns about the future we see the major purchase index slide and the savings index rise,” Staton explains.
“Perhaps the best thing to look forward to is that a Brexit-free take on how consumers feel is only a matter of months away. Or will that be when sentiment really plunges?”