LONDON — A long-running survey of consumer attitudes in Britain found that UK shoppers are increasingly pessimistic about the economy.
GfK’s consumer confidence barometer for April, release on Friday, dropped on point from the previous month to -7. That is the lowest reading since last November.
Four out of the five measures used to calculate the total declined. Those measures that decline address personal finance situation and people’s view of the economy, both for the last 12 months and the year ahead.
Consumers are particularly pessimistic about the state of the UK economy. GfK recorded a reading of -23 for people’s perceptions of the economy over the last 12 months and -21 for the year ahead. For comparison, the reading last April was -14 for both economic measures.
Despite the negative numbers, Joe Staton, Head of Market Dynamics at GfK, takes a relatively upbeat view of the figures, saying in a statement: “In the face of widespread reports of rampant inflation, stagnating wages and anxiety over our borrowing binge, UK consumer confidence is surprisingly stable.”
Price inflation hit 2.3% in March and is set to rise to over 3% later this year, meaning prices of essentials like food and clothing are rising faster than wages.
Staton continues: “Although the Overall Index Score remains in negative territory, and has dipped this month, we have not seen any evidence of the predicted post-Trigger downturn, despite high levels of concern about the general economic situation of the country. Consumers continue to remain positive about the state of their personal finances and even report that now is a good time to buy.”
While Staton appears optimistic, GfK has headed the press release for the latest data: “Is pre-Brexit economic turbulence brewing?”
Staton adds: “But is this too good to be true? Is this simply the calm before the storm? Is pre-Brexit economic turbulence yet to really batter households? That threat cannot be ruled out.”
Retail sales collapsed by 1.8% in March, well above the 0.2% decline economists had predicted, pointing to a slowdown in consumer activity. GfK’s data also comes on the same day as Nationwide reported the biggest month-on-month fall in house prices since 2008, with the mortgage lender blaming a “squeeze on real income” for consumers.