NEWS30 August 2019

Consumer confidence down on all measures pre-Brexit

Brexit Finance News Retail Trends UK

UK – Consumer confidence has declined across all measures in August, with a sharp drop in people’s expectations for their own finances, according to GfK’s Consumer Confidence Index.

Woman holding purse and coin

August’s overall index score was -14, three points down on the "marginally more bullish" score recorded in July.

The measure for changes in people’s personal financial situations during the last 12 months decreased by two points to -1; while the forecast for the next 12 months dropped by five points to +2. The personal finance measures were five and six points lower respectively than August 2018.

Joe Staton, client strategy director at GfK, said: "A significant development in August is the sudden drop in views on personal finances ‘over the next 12 months’ after the encouraging jump in this measure last month. For a long time, the downward momentum in the Overall Index Score has been associated with our views on economy. But reduced confidence is now affecting how we see our personal finances."

People’s view of the UK’s general economic situation also worsened, with the measure for the past 12 months decreasing two points to -34. Expectations for the economy in the next year declined six points to -38 – 12 points lower than the same period last year.

The major purchase index, which tracks people’s views on whether now is a good time to be marking large purchases such as furniture, also slid by three points in August.

Staton 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.

"If there is a continuation of that dip in our feelings about our ‘future wallets', we’d quickly see a headline score (the average of our five sub-measures) 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."

The monthly UK Consumer Confidence Barometer is conducted by GfK on behalf of the European Commission. Interviewing took place during during 1st – 14th August 2019.