Households growing more fearful about personal finances and wider economy, survey finds, as odds on no-deal Brexit shorten
- Consumer confidence tumbled from -11 to -14 in August, GFK says
- The findings will come as another blow to the ailing high street
- The consumer confidence index has been in negative territory since March 2016
Households are feeling increasingly gloomy about their personal finances and the health of the wider economy over the next 12 months, a survey has found.
According to GfK’s long-running index, overall consumer confidence slid three points to minus 14 in August amid ‘pre-Brexit nerves’.
It marks the weakest reading since January this year when sentiment tumbled to its lowest point since 2013, and comes as the country edges ever closer to a no-deal Brexit.
Overall consumer confidence slid three points to minus 14 in August, according to GfK’s long-running Consumer Confidence Index
In August consumers became particularly concerned about the general economic situation in the year ahead. That measure tumbled by six points to minus 38 – that’s 12 points lower than this time last year.
Households are also far less confident about their personal finances now. This measure dropped by five points following an encouraging jump just a month earlier.
Shoppers showed less willingness to splash out ‘big ticket’ items too.
Joe Staton, client strategy director at GfK, said: ‘Until Brexit leaves the front pages – whenever that will be – consumers can be forgiven for feeling nervous not just about the wider economy but also about their financial situation.’
It is another blow to the ailing retail industry, as weak consumer sentiment often translates to a tightening of the purse strings and a drop in retail sales.
Firms including Asda and McColl’s recently admitted that the political environment was making life more difficult, while bathrooms chain Bathstore buckled under the pressure and became the latest firm to tip into administration last month.
GfK found that shoppers showed less willingness to splash out ‘big ticket’ items last month
Staton warned that if the downward trend continues, the index could soon be approaching levels not seen since the credit crunch.
‘If there is a continuation of that dip in our feelings about our future wallets, we’d quickly see a headline score crash to a level that approaches the worrying figures seen in the worst days of the 2008/2009 financial crisis.
‘We are not there yet, and we may not necessarily get there, but it’s a trend we need to watch carefully,’ he said.