Consumer confidence drops to lowest level since 1974
Consumer confidence has plunged to a record low in May with no “reason for optimism any time soon”.
The data from GfK’s long-running Consumer Confidence Index shows that the headline index has decreased by two points to -40 this month, which is the lowest score since the firm’s records began in 1974.
Joe Staton, client strategy director at GfK, said: ” May’s result is one point lower than the previous record set in July 2008 when the headline score plunged to -39. 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 shutdown.”
The news comes as UK unemployment hits a 50-year low with vacancies outnumbering job seekers for the first time, and inflation climbing to a 40-year high.
Staton said consumer pessimism is most evident in their outlook for the general economy with the sub-index declining by one point to -56% for the coming year.
However, the index measuring the forecast for personal finances over the next 12 months has increased by one point to -25, but this is 35 points lower than this time last year.
Meanwhile, GfK’s major purchase index has decreased for each of the past six months and is now at -35 following a drop of three points in May.
Staton added: “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.”
