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Consumers' confidence in UK economy slumps

PUBLISHED: 09:42 29 June 2018 | UPDATED: 09:57 29 June 2018

Consumer confidence has been affected by a fall in people's optimism about the general economy, GfK said. Picture: ANTONY KELLY

Consumer confidence has been affected by a fall in people's optimism about the general economy, GfK said. Picture: ANTONY KELLY

Archant Norfolk 2018

"Self-imposed austerity" among shoppers ahead of Brexit has caused a crash in consumer confidence, a new survey suggests.

GfK’s consumer confidence index fell two points to minus nine in June, largely influenced by a deterioration in people’s optimism about the general economy.

At the Royal Norfolk Show this week businesses expressed feelings of positivity in the economy after a quarterly index from the Federation of Small Businesses showed a jump in confidence.

Confidence in personal finances fell by one point – still one point higher than it was 12 months ago – but the forecast for the coming year dropped by two points, six points higher than last June.

However confidence in the general economic situation over the last year fell four points to minus 28, three points lower than a year ago, and expectations for the coming year also fell four points to minus 25.

The major purchase index, an indicator of confidence in buying big ticket items, also fell, by one point to zero.

The overall index score has now registered at zero or negative for 30 months compared with 2015 when there was a full year of positive numbers.

Joe Staton, client strategy director at GfK, said: “When will the strong jobs market and low interest rates boost the economic mood? That’s the key to confidence increasing more generally.

“Meanwhile, with Britain’s hard-pressed retail sector very much in the news, there is little comfort in the one-point drop to zero in the major purchase index. Shoppers are holding on to their cash and consumers in general seem set on their path of self-imposed austerity.”

He added: “The trend since those 2015 figures has been resolutely downwards and it’s difficult to see the direction changing in the run-up to the UK leaving the European Union in March 2019.”

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