Consumer confidence at two-year low

Consumer confidence has slumped to the lowest level since the height of the financial crisis as the Government’s cuts to public spending kicked in last month, according to a report.

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The GfK NOP Consumer Confidence Index dropped to -31, down from -28 in March and a drop from the -16 registered a year earlier.

All measures – perception of the health of the economy, personal financial health and major purchase intent – that make up the index were down in the month.

The report follows Office of National Statistics data yesterday (28 April) that showed that the economy grew by just 0.5% in the first quarter of the year. The increase was enough to claw back ground lost to severe snow at the end of 2010 but growth remains at the same level reported in the third quarter of last year.

Chancellor George Osborne unveiled measures in last month’s budget to stimulate growth and offset the impact of public sector cuts.

Nick Moon, managing director of GfK NOP Social Research says that the “worrring” dip to below -30 is proof that more needs to be done.

He adds: “Coming after six months of stagnant economic growth, this is a significant drop, one that is bad news for the Government and bad news for the economy. It suggests that the attempts to spur growth in last month’s budget have failed to convince the public, and this may well be sorely felt on the already beleaguered high street.”

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