Consumer confidence drops in July as ‘reality starts to bite’
Consumer confidence has dropped sharply in July as people become more concerned about their personal finances and the prospects for the wider economy.
GfK’s Consumer Confidence Index has fallen by six points to -30 to mark the first decline since January.
Joe Staton, client strategy director, GfK, said: “For the first six months of 2023, UK consumer confidence improved despite the headwinds of the cost-of-living crisis, with double-digit inflation outpacing income growth and rising interest rates impacting both home-owners and renters alike. Suddenly, this resilience has collapsed, resulting in a six-point fall this month in the headline score.”
GfK’s measure for the forecast for personal finances over the next 12 months has decreased by six points to -7, while the measure for people’s outlook for the general economic situation over the same period has dropped by eight points to -33.
Meanwhile, GfK’s major purchase index is down seven points to -32.
Staton added: “Reality has started to bite and, as people continue to struggle to make ends meet, consumers will pull back from spending, as is clear from the seven-point drop in this month’s measure of major purchase intentions. All in all it’s bad news. People are feeling economic pain and this confidence deficit needs to be reversed before the gains this year are lost.”
