UK consumer sentiment plunged again in March as fears about the soaring cost of living intensified, a survey showed.
The overall score in GfK’s consumer confidence index dropped to -31 from -26 a month earlier as all five component measures fell. The overall figure was the lowest since November 2020 when Covid-19 levels were rising rapidly with no vaccine.
The biggest decline was in households’ willingness to make a major purchase, which plunged to -24 from -15, followed by the outlook for the economy over the next year, which dropped to -49 from -43. People’s view of their personal financial situation also deteriorated.
The survey showed confidence dropping for a fourth straight month following a steep decline in February. Since then rising living costs have been exacerbated by Russia’s invasion of Ukraine, which has pushed prices of oil, grain and other commodities still higher.
The UK’s fiscal watchdog said on Wednesday that living standards would fall in 2022 at the fastest pace since the 1950s with energy bills rocketing. Shop prices, interest rates and taxes are also on the rise, squeezing disposable incomes further.
The survey for March was carried out before Chancellor Rishi Sunak published his spring mini-budget on Wednesday. The statement came in for widespread criticism for doing little to relieve the coming strain on households and businesses.
Joe Staton, GfK’s client strategy director, said: “A wall of worry is confronting consumers this month and there is an unmistakable sense of crisis in our numbers.
“Confidence in our personal financial situation and in the wider economy are severely depressed while the daily news of unimaginable suffering from a horrifying war in Europe and rising Covid numbers at home is adding to the bleak mood. The outlook for consumer confidence is not good. There’s more bad news to come.”
GfK surveyed 2,000 people aged 16 and over between 1 March and 14 March.