UK Consumer Confidence Falls to Record Low in August
August 18 2022 - 7:30PM
Dow Jones News
By Maria Martinez
British consumer confidence fell to a record low in August as
cost-of-living pressures and dim economic prospects continued to
build.
The consumer-confidence barometer compiled by research firm GfK
declined to minus 44 in August from minus 41 in July, the lowest
level since the survey began in 1974 and below economists'
expectations of consumer confidence remaining unchanged from the
previous month.
All five measures fell, reflecting acute concerns as the cost of
living soars, GfK client strategy director Joe Staton said. U.K.
inflation hit a new four-decade high of 10.1% in July, the highest
rate among the Group of Seven economies.
"With headline after headline revealing record inflation eroding
household buying power, the strain on the personal finances of many
in the U.K. is alarming," Mr. Staton said.
Consumer confidence hints at households' willingness to spend,
one of the major drivers of the U.K. economy. The index measuring
changes in personal finances over the past 12 months fell in
August, as well as the index for personal finances over the next 12
months. The major purchase index decreased by four points in
August.
The current subdued confidence levels have historically been
associated with economic recessions. The U.K. economy contracted in
the second quarter as households facing soaring inflation cut back
on spending. The Bank of England expects the U.K. will enter a
recession in the final three months of the year and won't exit it
until the start of 2024.
The sub-measure on the general economy over the past year has
decreased month-on-month since December 2021 and a similar
consistent sharp decline since December 2021 is evident in how
consumers see the economy a year ahead. August's reading of minus
60 sets a record low.
The GfK survey, which polled around 2,000 individuals, was
carried out between Aug. 1 and 12.
Write to Maria Martinez at maria.martinez@wsj.com
(END) Dow Jones Newswires
August 18, 2022 19:15 ET (23:15 GMT)
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