Consumer confidence falls amid Middle East fears as retail sales also disappoint
Consumer confidence has dropped in March as concerns grow over the impact of war in the Middle East on the UK economy.
GfK’s Consumer Confidence Index has fallen by two points in the month to -21.
Subscribe to TRBWhile the forecast for personal finances over the next year is down one point to 1, GfK’s measure for the general economic situation over the next 12 months has declined by six points to -37, which is eight points worse than March last year.
The major purchase index is also down, decreasing by four points to -18.
Neil Bellamy, consumer insights director at GfK, an NIQ Company, said: “People simply do not feel the economy is robust enough to ride out the knock-on effects from the Middle East conflict.
“Moreover, the decline in purchasing intentions, coupled with a six-point rise in the Savings Index, indicates people are holding on to their money and avoiding making major purchases while they wait to see what the medium-term impact of the conflict will be.”
“Looking ahead, he added: “There are two major concerns for the future. First, the UK will need to adopt a careful and balanced response to the wider volatility we have seen since the end of February.
“Second, with growing concerns over further sharp price rises in the coming months, unless there’s a swift resolution to the conflict, or government schemes such as additional support with energy bills come into fruition, this ripple of fear we are seeing in the March data has the danger of turning into a flood.”
The news comes as the Office for National Statistics (ONS) announced that retail sales volumes edged down 0.4% in February.
The ONS said supermarket sales volumes fell back following a rise in January, while non-store retailers also saw a fall. This came as retailers suggested that consumers brought forward their spending to January to take advantage of post-Christmas discounting.
