Consumer confidence slips into reverse

Consumer confidence has slipped back to -13 for the fifth time this year, indicating Britain’s economy could be in for a turbulent summer amid concerns over the potential financial impact of a no-deal Brexit.

Overall confidence fell three points in June, according to GfK’s consumer confidence index. A three-point rise in the savings index showspeople are thinking with caution about the future.

This is bolstered by a three-point decline in the major purchase index, which indicates whether people are planning on making big purchases such as furniture or electrical goods.

Meanwhile, the index measuring changes in personal finances during the last 12 months decreased by four points to -1, while the forecast for personal finances over the next 12 months decreased by three points to 2.

Views of the general economic situation paint a similar picture, with thoughts of Britain’s economy over the last 12 months down two points to -32, and expectations for the following 12 months down four points to -33 – eight points lower than in June 2018.

“Anybody who thought that last month’s increase in consumer confidence from -13 to -10 was the start of an encouraging upward trend will be disappointed,” says Joe Staton, client strategy director at GfK.

“We are back to where we have been on four other occasions this year. It’s not good news and as we get a better picture of who the UK’s next prime minister will be, consumers will no doubt ask themselves whether good news is to come out of the long-running Brexit saga.

“The 31 October deadline is just two months the other side of Britain’s summer holidays. So what happens in November? How will we all be affected? Should we save? Or should we splurge? Should we look forward with enthusiasm? Or should we worry as many pundits advise? Any bad news in Q3 or Q4 could easily impact that and see the overall index score drop dramatically.”