Consumer confidence lowest on record

Thursday 31st July 2008

Consumer confidence fell to the lowest level on record, according to the GfK NOP Consumer Confidence Barometer.

The index fell to -39 points – the lowest since its records began in 1974 – while confidence in the economy dropped seven points to -52 on the index.

People's expectations for their own finances fell nine points over the last year to -18 on the index.

Donna Culverwell at GfK NOP explained consumer confidence is now lower than when the UK was last in a recession.

"With the cost of living still on the increase, the housing market in a depression and reports of possible further increases in energy prices, levels of confidence amongst consumers are not surprisingly low, especially amongst women or those over the age of 50," she said.

"There seems to be little sign of any relief either; with the growing spectre of the UK going into recession, people are pessimistic and concerned about their future - reflected in the biggest drop this month being seen in people’s confidence in their own personal financial situation over coming twelve months."

Separate research from GfK NOP shows UK consumers are now tightening the belt and spending less on food, leisure activities and holidays.

Some 42 per cent of people have changed to buying supermarket own brands rather than branded goods and 28% have switched to a discount supermarket.

Furthermore, 41 per cent are going out to pubs or restaurants less and 38 per cent have cut back on the amount of holiday travel they plan to do.

Rising oil prices have also changed consumer behaviour with half of drivers reducing the number of journeys they make by car and 21 per cent of motorists using public transport more.

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