Consumer confidence falls as VAT rises
January saw decreases across all five measures; the most notable being in the "major purchase” index, which dropped 21 points, Gfk NOP revealed.
"In the 35 years since the index began, confidence has only slumped this much on six occasions, the last being in the midst of the 1992 recession," said Nick Moon, managing director at GfK NOP Social Research. "Today's figures, when combined with the bleak economic forecast, will make talk of a double-dip recession unavoidable."
Moon said that the VAT rise has had a widespread impact on consumers and seems to have hit people's economic confidence hard, especially as the biggest drop was in consumers' appetite for major purchases. "With inflation on the up and the full force of the cuts yet to hit, these figures could be the beginning of a very painful period, " he added.
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