Consumer confidence hits historical low

May’s index recorded an overall consumer confidence score of -40, two points lower than the previous month and one point lower than the previous record in July 2008 during the financial crisis.

Confidence in the general economic situation dropped three points to -63, while respondents were overwhelmingly negative about the economy for the year ahead, with the index measure falling one point to -56.

The GfK Consumer Confidence Index is based on a survey of a sample of 2,000 UK adults carried out between 30th April and 12th May 2022.

Respondents rated their personal financial situation over the past year at -22, three points lower than April’s index, but there was a one-point rise in people’s outlook for their own financial situation for the next 12 months to -25.

The major purchase index, which measures whether now is the right time to make a major purchase, plummeted three points to -35.

The savings index stayed in positive territory at 10, the same score as seen in April.

The figures come as UK unemployment hits a 50-year low with vacancies outnumbering job seekers for the first time, and inflation peaks at a 40-year high driven by soaring food and fuel bills.

Joe Staton, client strategy director at GfK, said: “This means consumer confidence is now weaker than in the darkest days of the global banking crisis, the impact of Brexit on the economy, or the Covid-19 shutdown.

“Even the Bank of England is pessimistic, with governor Andrew Bailey this week offering no hope of tackling inflation. The outlook for consumer confidence is gloomy, and nothing on the economic horizon shows a reason for optimism any time soon.”