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UK consumer confidence even lower than in 2008 financial crisis | Retail industry

Fears that Britain is heading for a marked slowdown in client spending have intensified because it emerged that the general public is gloomier concerning the economic system than when banks had been on the point of collapse through the monetary disaster of 2008.

A mix of rocketing power costs, increased taxes and a surge within the annual inflation price to its highest stage in three a long time meant confidence was in freefall, in response to the most recent month-to-month snapshot of sentiment.

Labour referred to as on Rishi Sunak to do extra to handle the price of dwelling disaster in spite of everything 5 measures of client confidence tracked by the polling agency GfK recorded sharp falls in April – a month that noticed the elevating of the power value cap and a rise in nationwide insurance coverage contributions.

Abena Oppong-Asare, shadow exchequer secretary to the Treasury, stated: “These concerning figures sadly come as no surprise, given families are seeing the double whammy of an enormous Tory tax hike and soaring energy bills.

“Collapsing consumer confidence shows how the cost of living crisis is weighing down growth. How many warnings like this does the chancellor need to grasp the seriousness of the cost of living crisis?”

The report discovered the general public extra pessimistic about their very own funds, the state of the economic system and their willingness to spend cash on massive ticket gadgets akin to automobiles.

The headline client confidence index – a mix of the 5 particular person measures – dropped by seven factors to -38 in April. A yr in the past the determine was -15.

Joe Staton, the consumer technique director at GfK, stated: “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. 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.”

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A separate survey by the consultancy agency KPMG discovered a 3rd of customers had been spending much less throughout 2022, with significantly sharp drops in garments procuring and consuming out.

Andrew Goodwin, chief UK economist on the consultancy agency Oxford Economics, stated: “We shouldn’t be surprised if GDP falls in the second quarter given the likely impact of the extra bank holiday [for the Queen’s platinum jubilee] and the loss of support from Covid testing.

But talk of a UK recession looks premature, not least because there will be a mechanical rebound in the third quarter, because it will have a full quota of working days. Still, the intensifying squeeze on household finances mean the UK economy is in for a bumpy ride through the rest of 2022.”

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