Consumer confidence falls in July
The survey also revealed that the forecast about personal finances and the overall UK economy also declined six to -7 and eight points to -33, respectively, over the next year
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Consumer confidence index dropped six points in July to -30 as “reality bites” resilient consumers amid rising inflation and interest rates, according to GfK’s long-running survey.
The survey revealed that all five measures were down in comparison to last month’s announcement.
The index measuring changes in personal finances during the last year was down five points at -20.
Additionally, the measure for the general economic situation of the country during the last 12 months is down four points at -58.
The survey also revealed that the forecast about personal finances and the overall UK economy also declined six to -7 and eight points to -33, respectively, over the next year.
However, the forecast for personal finances over the next 12 months is still 19 points higher than this time last year, while expectations for the general economy is 24 points better than last July.
The major purchase index is down seven points to -32, but is still two points higher than this month last year.
Lastly, the savings index was up one point to 26 and is 13 points higher than this time last year.
Joe Staton, client strategy director, GfK, said: “For the first six months of 2023, UK consumer confidence improved despite the headwinds of the cost-of-living crisis, with double-digit inflation outpacing income growth and rising interest rates impacting both home-owners and renters alike. Suddenly, this resilience has collapsed, resulting in a six-point fall this month in the headline score. There are clear concerns for the coming year for our personal finances and for the wider UK economy, with these measures down six and eight points, respectively.
“The recent fall in headline inflation will do little to improve the financial mood; consumers need to see falling prices and interest rates before that happens. Reality has started to bite and, as people continue to struggle to make ends meet, consumers will pull back from spending, as is clear from the seven-point drop in this month’s measure of major purchase intentions. All in all it’s bad news. People are feeling economic pain and this confidence deficit needs to be reversed before the gains this year are lost.”
