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Surging prices see consumer confidence near historic lows

Rising costs and an uncertain geopolitical world has taken a further toll on consumer confidence in the UK, with fresh data released on Friday putting sentiment at record lows.
The GfK consumer confidence index tumbled seven points to reach -38 in April, compared to -31 in March, and falling from -15 in April last year.

It left the long-running index just one point off its lowest ever point.

Consumer sentiment going forward was looking even worse, with the personal finance situation over the next year losing eight points to -26, and the general economic situation over the next year down six points to -55.

The personal finance score was worse than the initial Covid-19 shock in early 2020, while the general economic outlook was lower than it was during the 2008 financial crash.

Rising bills and inflation also saw savings take a hit, with the savings index losing eight points over the month and 12 points over the year, to reach 10 for April.

“The cost crunch is really hitting the pockets of UK consumers and the headline confidence score has dropped to a near historic low,” said GfK client strategy director Joe Staton.

“The scores looking at the next 12 months for our personal finances at -26 and the general economy at -55 are worse than the 2008 financial crash.

“The personal finance score for the next year is also worse than the initial Covid shock in 2020.”

Staton said that, with rising inflation and interest rates meeting low growth and declining incomes, consumers were “understandably extremely cautious” about any spending.

“There’s clear evidence that Brits are thinking twice about shopping, as seen in the tumbling Major Purchase Index – now is not considered to be a good time to buy.

“This is dire news for consumer confidence and with little prospect of any economic relief on the horizon we can only forecast further falls in the index for the year ahead.”

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