United Kingdom: Consumers grow gloomier in June
June 29, 2018
The GfK NOP consumer confidence indicator fell from minus 7 points in May to minus 9 points in June. The index remains firmly entrenched in negative territory, where it has been since April 2016, highlighting that consumers are still broadly pessimistic.
June’s decline reflected consumers’ worsened views of their personal financial situation over the previous 12 months and for the year ahead. In addition, consumers grew more pessimistic concerning the general economic situation over the last 12 months and for the year ahead. Furthermore, consumers became less willing to make major purchases in June. In the months ahead, it is hard to see a sustained upturn in consumer confidence, with Brexit uncertainty intensifying, real wage growth set to remain fairly feeble and a possible hike in interest rates.
Joe Staton, Client Strategy Director at GfK, commented: “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”.
Author: Oliver Reynolds, Economist