Confidence in household finances has plummeted to a near-decade low, research showed on Wednesday, as the growing cost of living crisis weighed heavily.
The latest YouGov/Cebr Consumer Confidence Index fell 2.4 points to 106.6 in February.
Homeowners remained generally optimistic, with house price measures for the past month rising nearly four points and the score for the next 12 months edging ahead 0.8% to 138.2, the highest since February 2017. Workers were also increasingly upbeat about job security for the year ahead.
But the cost of living crisis continued to weigh heavily, dragging the overall index lower. The measure looking at people’s household financial situation over the coming 12 months slumped 19.3 points to 59.7, while the score looking at the previous 30 days fell 9.2 points to 71.5.
Both readings were the lowest since the Consumer Confidence Index started in September 2012.
Kay Neufeld, head of forecasting and thought leadership at the Centre for Economics and Business Research, said: “February’s drop in the Consumer Confidence Index was mainly driven by precipitous declines in the measures tracking households’ financial situation
“Against a backdrop of accelerating inflation and the upcoming increase in the energy price cap, households are understandably nervous about the outlook for their personal finances. Meanwhile the war in Ukraine is likely to further add to spiralling energy costs, based on the turbulence in oil and gas markets in recent days following the imposition of Western sanctions on Russia.”
Darren Yaxley, head of reputation research at YouGov, said: “The cost of living crisis is having a serious impact on consumer confidence. Although the overall index remains positive, the dip in February is compounded by tumbling household finance measures.”
YouGov carries out more than 6,000 interviews every month to compile the index. Respondents are asked about household finances, property prices, job security and business activity in both the past 30 days and in the next 12 months.