Consumer confidence sinks to three year low

Consumer confidence has slumped to its lowest level in almost three years, as optimism failed to be lifted by pre-Christmas spending, according to the latest figures from GfK NOP.

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The GfK NOP Consumer Confidence index score dropped two points in December to -33, a level that has only been lower on two occasions in the 37 years the index has been running – a single month in 1990 and eight months during the 2008 to 2009 recession.

The index surveys consumers on their personal financial situations over the last and coming 12 months, the general economic situation over the same period and whether it is the right itme to make major purchases or save money instead.

Nick Moon, managing director of GfK NOP Social Research, says it is hard to see grounds for a recovery in confidence in the near future.

He adds: “The eight per cent drop in the score for the general economic situation over the next 12 months [to -41] is significant and will make chilling reading for the Government and British businesses.”

The Bank of England’s deputy governor Charlie Bean warned earlier this week that there is a distinct possibility the British economy could sink back into recession in 2012.

The GfK NOP figures chime with those from the Office of National Statistics, which said that retail sales dropped 0.4% in November as consumers struggling with living costs held back on making big ticket purchases. Retailers have turned to discounting to lure in customers struggling to afford their Christmas shopping.

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