As expected UK Consumer confidence in July (as measured by
GfK NOP for the European Commission) hit a record low of –39, down 5 points on
the month and down 33 points on a year ago. It is below the previous record low
of –35 in March 1990, occurring just ahead of the early 90s recession.
Rising energy and food prices, falling house and share
prices and growing job worries all contributed to the crisis in consumer
confidence.
Of the five measures comprising the headline index, the
measure of personal finances looking forward 12 months fell the most, down 9
points to –18, its lowest since May 1994.
Consumers are retrenching in the face of growing financial
pressures – the measure of the spending climate for making purchases of
consumer durables such as furniture and electrical goods is at a record low.
A separate GfK NOP survey found the UK
consumer tightening the belt as the
combined effects of rising inflation and the credit crunch take their toll by
spending less on food, leisure activities and holidays.
42% have changed to buying supermarket own
brands rather than branded goods and 28% have switched to a discount
supermarket. 41% are going out to pubs or restaurants
less. 38% have cut back on the amount of holiday travel they plan
to do
Soaring oil prices and general concerns about the environment have also led to
a reduction in car travel and increased the attraction of public transport as
an alternative. 50% of drivers have reduced the number of journeys
they make by car 21% of drivers are using public transport more
rather than travel by car
The impact
is not uniform across the UK. Sentiment in Wales is currently weakest (-49) and
is highest in Scotland (-36)
The July UK
Consumer Confidence Monitor is published on August 6th. Please ring
0208 944 7510 for details.