UK consumer confidence weaker than during major recessions
Consumer confidence in the UK is weaker than during the four major recessions of the past half century as rapidly rising inflation saps morale.
Although the UK is technically yet to enter recession, the latest barometer of sentiment from the data company GfK found the public gloomier than at any time since the survey began in January 1974.
The monthly look at confidence found the relatively upbeat mood as Britain emerged from lockdown in 2021 had been replaced by deepening pessimism as the annual increase in the cost of living has climbed to a 40-year high of 10.1%.
In grim news for businesses that rely on consumer spending, the public mood is now more downbeat than it was during the recessions of the mid-1970s, the early 1980s, the early 1990s and the late 2000s.
The period covered by the survey also covers the three-day week of 1974, the sterling crisis of 1976, and the pound’s ejection from the European exchange rate mechanism in 1992 – none of which was marked by such a bleak public mood.
Sentiment has been falling steadily throughout 2022 and dropped by a further three points to a record low of -44 in August. A year ago the index stood at -8.
Consumers are pessimistic about the outlook for their own finances in the year ahead (-31) as a further sharp increase in the energy price cap looms in October, but even more pessimistic (-60) about the prospects for the economy.
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Joe Staton, GfK’s client strategy director, said there had been a fall in all five measures that made up the overall consumer confidence index, reflecting “acute concerns” about a soaring cost of living.
“A sense of
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