Economy

Consumer confidence in freefall, says GfK

Consumers looking to make a major purchase decreased by eight points to -32 in March; this is 20 points lower than in April last year

UK consumer confidence was in “freefall” during April according to the longstanding GfK Consumer Confidence Index.

Its index decreased seven points to -38 in April, with all five measures down in comparison to the 25 March announcement. The index measuring changes in personal finances over the last 12 months decreased six points to -19; this is 16 points worse than April 2021.

Meanwhile, the forecast for personal finances over the next 12 months decreased eight points to -26; some 36 points lower than this time last year.

The measure for the general economic situation of the country during the last 12 months was found to have fallen by nine points at -60; this is two points lower than in April 2021, with expectations for the general economic situation over the coming 12 months also having dropped by six points to -55; this is 44 points lower than April 2021.

In addition, consumers looking to make a major purchase also decreased by eight points to -32 in March; this is 20 points lower than in April last year. The Savings Index was also down by eight points to +10 in April; this is 12 points lower than this time last year.

Joe Staton, Client Strategy director at GfK, said: “The cost crunch is really hitting the pockets of UK consumers and the headline confidence score has dropped to a near historic low. The scores looking at the next 12 months for our personal finances at -26 and the general economy at -55 are worse than the 2008 financial crash.

“The personal finance score for the next year is also worse than the initial Covid shock in 2020. When rising inflation and interest rates meet low growth and declining incomes, consumers will understandably be extremely cautious about any spending.”

He added: “There’s clear evidence that Brits are thinking twice about shopping, as seen in the tumbling Major Purchase Index – now is not considered to be a good time to buy. This is dire news for consumer confidence and with little prospect of any economic relief on the horizon we can only forecast further falls in the Index for the year ahead.”

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