A carefully watched survey shows that consumer confidence in the UK is at its lowest sustained level in almost 50 years as the country braces for a prolonged recession.
The Consumer Confidence Index rose just 2 points to -42 in December from the previous month. It has averaged -10 since the index began.
Over the past year, Britons have been hit by soaring prices, putting pressure on household budgets across the country. Energy prices soared after Russia invaded Ukraine in February, leaving many consumers with little money after paying their energy and food bills.
Since the survey began in 1974, the index has not fallen below -40 until May 2022, marking the start of double-digit inflation. It remains below that level, marking the longest period of low confidence in nearly half a century.
Joe Staton, GfK’s Director of Client Strategy, warned that “the road ahead is bleak” due to the bleak economic outlook for the UK. “Real wages are declining as inflation continues to ramp up, putting more pressure on many household discretionary budgets as we enter the last few days of shopping before Christmas,” he added. rice field.
easing inflation barely down from a 41-year high of 11.1% in October to 10.7% in November. Food inflation he rose to 14.6%, reaching its highest level since 1980.
of uk economy Business surveys such as the Purchasing Managers’ Index contracted in the third quarter and pointed to further economic deterioration in the fourth quarter.
The Bank of England and the Office of Budgetary Responsibility forecast a prolonged recession in 2023 as high inflation continues to hit household budgets.
Linda Ellett, UK Head of Consumer, Retail and Leisure at KPMG, said: “Christmas brings a good respite, but the fundamentals driving this low consumer confidence will continue into the New Year.” rice field.
A GfK survey based on data collected in the first 10 days of December found that Britons’ confidence in their personal finances in the coming year remains at record low levels.
As a result, nearly two in three people cut non-essential spending and use less energy at home, according to an ONS survey released Thursday. Nearly half of the respondents said they bought less food.
“With no immediate prospects for good financial news, confidence is unlikely to return anytime soon,” Staton said.