British consumer confidence fell to a record low in August as cost-of-living pressures and a weak economic outlook continued to mount.
Research firm GfK’s consumer confidence barometer fell to minus 44 in August from minus 41 in July, the lowest level since the survey began in 1974 and below expectations of economists that consumer confidence remained unchanged from the previous month.
All five measures fell, reflecting acute concerns as the cost of living rises, said GfK’s director of client strategy, Joe Staton. UK inflation hit a new four-decade high of 10.1% in July, the highest rate among Group of Seven economies.
“With headline after headline revealing record inflation eroding household purchasing power, the strain on the personal finances of many in the UK is alarming,” Staton said.
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Consumer confidence points to households’ willingness to spend, one of the main drivers of the UK economy. The index that measures changes in personal finances over the past 12 months fell in August, as did the index for personal finances over the next 12 months. The main shopping index declined four points in August.
Current low levels of confidence have historically been associated with economic recession. The UK economy contracted in the second quarter as households facing rising inflation cut spending. The Bank of England expects the UK to enter recession in the last three months of the year and not exit until early 2024.
The submeasure on the overall economy over the past year has declined month-on-month since December 2021, and a similarly sharp and steady decline since December 2021 is evident in how consumers view the economy one year ahead. . The August reading of minus 60 sets a record low.
The GfK poll, which polled around 2,000 people, was conducted between August 1 and 12.
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This article was published by Dow Jones Newswires, a service of the Dow Jones Group