Consumer confidence plunges as concerns rise over cost of living – survey

A general view of a utility bill (PA) (PA Archive)

Consumer confidence has plunged amid increasing anxiety about the rising cost of living, a long-running survey suggests.

GfK’s Consumer Confidence Barometer fell by five points to minus 13 in September, a drop not seen since October last year.

All measures of the survey, including confidence in the general economic situation and personal finances, were down in comparison to last month.

Source: GfK

The index also recorded a three-point drop to minus six in the major purchase index, an indicator of consumer confidence in buying big ticket items, in worrying news for hard-pressed retailers looking to build sales as they go into the key holiday period.

Confidence in personal finances over the last 12 months dropped four points to minus four, while the forecast for the next 12 months fell six points to five – although it remains four points higher than this time last year.

Expectations for the general economic situation over the coming 12 months fell 10 points to minus 16, but is still 22 points higher than September last year.

Source: GfK

GfK client strategy director Joe Staton said: “On the back of concerns about rising prices for fuel and food, the growth in headline inflation, tax hikes, empty shelves and the end of the furlough scheme, September sees consumers slamming on the brakes as those already in economic hardship anticipate a potential cost of living crisis.

“All measures have declined this month and consumers are clearly worrying about their personal financial situation and the wider economic prospects for the year ahead.”

“When consumer confidence drops, shoppers tend to spend less, and this dampens the overall economic prospects for the UK. This really is an unwelcome picture going into 2022 and beyond.”