UK Consumer Confidence Relapses
UK Consumer Confidence Relapses

UK Consumer Confidence Relapses

UK Consumer Confidence Relapses

Consumer confidence in Britain has fallen to levels last seen in the immediate aftermath of the Brexit vote in June 2016, with expectations of UK economic growth deteriorating.
The long-running GfK Consumer Confidence Index dropped one point to a balance of -10 in October, edging closer to the -12 recorded the month after Britain voted to leave the European Union, Insider.co. reported.
The move was driven by slip in various economic indices, with the measure for the general economic situation over the last year falling one point to -29. That was 10 points lower than October of last year. Consumer debt is rising by nearly 10% a year.
Economic expectations for the coming 12 months also slipped two points to -26, making it nine points lower than the same month in 2016. However, the two measures linked to spending picked up in October as consumers showed their resilience in the face of rising inflation, sluggish wage growth and a potential Bank of England interest rate hike on Thursday.
A near-double-digit increase in lending to households in the year to September has left the BoE on track to raise interest rates, amid concerns that consumers are creating an unmanageable mountain of unsecured debt.
“It’s no surprise that the overall index score continues to bump along in negative territory this month,” said Joe Staton, GfK’s head of market dynamics. “As concerns about the wider economic prospects for the UK economy dampen our outlook, consumers are showing no real get-up-and-go.
The personal finance index for the last year picked up by one point to zero in October, while the major purchase measure climbed two points to +3.
Staton added: “The tiny shift up a point in how we view our personal finances over the past year is counter-intuitive given rising living costs, an imminent interest rate rise, and the reality that we earn less in real terms in 2017 than in early 2006.
“Our enthusiasm for spending, as witnessed by the uptick in the major purchase index, is more worrying than reassuring. Surging credit card use is fuelling spending at the expense of our appetite for saving, which is growing at the slowest rate since the start of the 2008/2009 financial crisis.”
GfK said the savings index was at +3 in October, in line with September’s reading, but nine points below October last year.

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