Consumer confidence near historic low as retail sales tumble
New figures have shown that consumer confidence has crashed in April as shoppers worry about the economy and rising inflation.
Data from GfK’s longstanding Consumer Confidence Index has revealed that the headline index has dropped by seven points to -38.
The index measuring the forecast for people’s personal finances over the next 12 months has decreased by eight points to -26.
Meanwhile, the measure for expectations for the general economic situation over the same period has dropped by six points to -55.
Joe Staton, client strategy director GfK, said: “The cost crunch is really hitting the pockets of UK consumers and the headline confidence score has dropped to a near historic low.
“The scores looking at the next 12 months for our personal finances at -26 and the general economy at -55 are worse than the 2008 financial crash. The personal finance score for the next year is also worse than the initial Covid shock in 2020. When rising inflation and interest rates meet low growth and declining incomes, consumers will understandably be extremely cautious about any spending.”
Looking at GfK’s major purchase index, this has fallen by eight points to -32 which is 20 points lower than the same time last year.
Staton added: “There’s clear evidence that Brits are thinking twice about shopping, as seen in the tumbling major purchase index – now is not considered to be a good time to buy. This is dire news for consumer confidence and with little prospect of any economic relief on the horizon we can only forecast further falls in the index for the year ahead.”
The news comes as figures from The Office for National Statistics show that UK retail sales volumes fell by 1.4% in March, following a drop of 0.5% in February. However, sales volumes were 2.2% above their pre-coronavirus levels in February 2020. Online sales in March were hit the hardest with a decline of 7.9%.
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