NEWS14 November 2022

Consumer confidence falls to lowest level since April 2020

Cost of Living News Trends UK

UK – Consumer confidence in the UK has hit its lowest point since the beginning of the Covid-19 pandemic driven by sharp falls in confidence in house prices and economic outlook, according to the YouGov and the Centre for Economics and Business Research (Cebr) consumer confidence index.

Money under an umbrella

The research found that consumer confidence in October had fallen three points to a total of 94.7, which was the fourth-lowest score in the history of the index and lowest since April 2020.

Worries about the housing market were at the forefront of the decline in consumer confidence, according to the index, with perceptions of house prices over the previous 30 days crashing 9.4 points to 115.4 overall, while outlook for the year ahead dropped from 120.4 to 109.1.

The research is based on 6,000 interviews carried out every month, with a score of below 100 representing negative confidence and a positive one being 100 or above.

Confidence in household finances for the year ahead was the lowest score by some distance in the index, although it rose slightly from 43 to 45.5.

For the year ahead, consumers were negative about the economic outlook, which was at 55.8, a decline from 55.8 the previous month.

Confidence in job security worsened, falling from 93.6 to 91.1 for the past 30 days, although there was an improvement in outlook for the year ahead, up from 118.3 to 118.8.

The index said that employees felt their workplaces were less busy, down from 108.6 to 107.3 for the previous month and from 116.5 to 114.9 for the next 12 months.

Emma McInnes, global head of financial services at YouGov, said: “The continued pessimism around household finances contributes to another month in which we see a falling score in our consumer confidence index.

“Concern around household finances remains comfortably the lowest score in the index overall, and amid rising interest rates making mortgages more expensive, we could see this figure decline further still in the months ahead.”

Josie Dent, managing economist at Cebr, said: “Consumer sentiment suffered yet another decline in October as the fall-out from the so-called ‘mini budget’ compounded ongoing worries about the cost-of-living crisis.

“It is therefore unsurprising to see the backward and forward-looking indicators on home values reporting the largest falls this month.”