Personal finance worries cause record low consumer confidence News

UK – Consumer confidence dropped five points from August to September to hit another record low of -49 amid a cost-of-living crisis and high inflation, according to GfK’s Consumer Confidence Index.

GfK found that there was a nine-point fall from the previous month in people’s forecast for their personal finances over the year ahead, hitting -40 and 45 points lower than September 2021.

There was a three-point fall from August in respondents’ views on their finances’ performance in the previous 12 months to -28 for September, which is 24 points worse than the same month last year.

The results are based on a survey of 2,000 adults carried out between 1st and 14th September 2022, and covered a period that included the announcement by the government of an energy bill bailout and the death of Queen Elizabeth II. GfK has run the survey since 1974.

The latest survey said that confidence in the general economic situation of the country during the last 12 months is down four points at -72 for September 2022, which is 29 points lower than in September 2021.

There was also a deterioration in expectations for the general economic situation over the coming 12 months, registering an eight-point drop to -68. This is 52 points lower than September 2021.

The major purchase index, which measures whether now is a good time for a major purchase, was unchanged this month at -38, but 32 points lower than this month last year.

The savings index, which covers whether now is a good time to save, is down seven points in September but remains in positive territory at +11, albeit 11 points lower than September 2021.

Joe Staton, client strategy director at GfK, said: “There have been new lows in four out of the last five months and all measures are once again severely depressed.

“Especially worrying are the two key future-facing indicators on personal finances in the coming year (down nine points to -40) and the economy in the next 12 months (down eight to -68). These numbers are where many forecasters look for signs of economic optimism among consumers and the results deliver very bad news in that respect.

“Consumers are buckling under the pressure of the UK’s growing cost-of-living crisis driven by rapidly rising food prices, domestic fuel bills and mortgage payments. They are asking themselves when and how the situation will improve.”

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