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Consumer confidence slumps to record low
British consumer confidence has fallen to a record low according to a report released this week. Rising inflation and the increased cost of borrowing means the UK consumer confidence index has hit 79, falling from 94 in 2007.
The survey, by market research company Nielsen and the British Retail Consortium (BRC), asked over 1,000 consumers about their thoughts and feelings on job prospects, personal finances, spending intentions and major concerns.
The fall in consumer confidence can be attributed to a combination of increasingly negative consumer sentiment about job prospects, personal finances and personal spending power. 60% of people polled said they thought job prospects were either “not so good or bad” compared with 50% in 2007. 57% of people now think that their own personal finances will be “not so good or bad” over the coming 12 months compared with 45% six months ago and three quarters of people believe that now is not a good time to spend on things they want or need.
Mike Watkins, senior manager for retailer services at Nielsen commented: “The Nielsen/BRC UK Consumer Confidence index now stands at 79. To put this into context, this time last year the index stood at 91, which was the lowest score we had seen since we began polling this survey in 2003. The fact that the score has plummeted a further 12 points is telling of how much consumers are being stretched.
“Our survey reveals that 55 percent of people ranked inflation as their main concern during periods of economic downturn while 39 percent said interest rates. Unfortunately we are being hit with both at present. This has caused significant unease among consumers.”
British Retail Consortium (BRC) director General Stephen Robertson added: “With one in five people saying they have no spare cash, the highest ever recorded by this survey, customers are telling us they are cutting back on spending on all sorts of non-essentials. Clothes, new technology and out of home entertainment are the biggest casualties as consumers attempt to manage their money.
“It’s clear we are seeing the effects of people’s concern about the future and about their own levels of debt.”
Patrick Schmitt 11/06/08