The latest Consumer Confidence Barometer from GfK has found a dramatic dip in consumer confidence and low levels of expectation that things will improve on both a personal and wider level over the coming year.
The gloomy findings come amid fears of further disruption caused by enforced restrictions and economic downturns as a result of the global pandemic. Alarmingly, the research was carried out between 1-14 October, before the latest social distancing regulations were bought into place.
The index measuring changes in personal finance over the past year recorded a drop of two points to -9, 10 points lower than in October 2019. A forecast for the next 12 months is down one point to zero, one point lower than the same month last year.
Looking at the economy in more general terms, there’s been a six-point fall in confidence to -67, a full 34 points lower than was recorded a year ago. Expectations for the next 12 months are down by 12 points to -50, 13 points lower than last October. GfK’s client strategy director Joe Staton describes the expectations stat in particular as being “worrying”.
The major purchase index, the measurement that records consumer intention to buy larger, pricier goods such as furniture or electrical equipment, is down by six points to -27, 28 points lower than at the same time last year. The savings index dropped six points to 14, seven points lower than October 2019 and highlighting a reluctance, or inability, among consumers to save money.
Staton warns of the threat of a double-dip in UK consumer confidence and says that many people face an uneasy run-up to Christmas as they look to cope with uncertainty surrounding possible increased restrictions and ongoing worries about personal finance.
“This is news we could do without at any time of year, but in the run-up to the traditional Christmas spending season it’s a particularly unwelcome spectre at the feast,” he explains.
“People in the UK have worked their way through the lockdown earlier this year, but they know their troubles are still not over. Many will now be contemplating months of new restrictions as well as the health and money anxieties that go with that.”