Consumer confidence in the UK has fallen to a record low as fears of a looming recession intensify as runaway inflation increases pressure on household finances.
Specifically, according to GfK, its consumer confidence index fell by 3 points to -44 in August, the lowest level since records began in 1974.
All individual measures of the index fell, with the outlook for personal finances taking the biggest hit.
“A sense of resentment about the UK economy is a key component of the findings,” said Joe Staton, director of client strategy at GfK. “The crisis of confidence can only worsen in the dark days of autumn and the colder months of winter,” he adds.
The figures reflect an annual jump in inflation, which hit a four-decade high of 10.1% last month, with costs rising in everything from food and energy to clothing.
The Bank of England expects price rises to reach as much as 13% in the coming months, increasing the pressure on consumers who are seeing their real wages fall at a record pace.
“Consumers are either already struggling with rising costs or fearing what’s on the horizon,” said Linda Ellett, head of consumer markets, retail and leisure at KPMG UK. “The clouds of this storm are fast approaching, with higher costs constraining spending capacity.”
At the same time, a survey of business output by Lloyds Bank Group Plc showed a decline in 9 of the 14 industries it tracks. According to the report, 10 sectors saw demand decline, with tourism and leisure taking the biggest hit.
Source: Capital
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