United Kingdom: Consumers grow more pessimistic in July
July 31, 2018
The GfK NOP consumer confidence indicator fell from minus 9 points in June to minus 10 points in July. The index remains firmly entrenched in negative territory, where it has been since April 2016, highlighting that consumers are broadly pessimistic.
July’s decline reflected consumers’ worsened views of the general economic situation over the next 12 months and a reduced willingness to make major purchases. In contrast, consumers grew more optimistic about their personal financial situation over the last 12 months and for the year ahead, while their sentiment regarding economic conditions over the last 12 months was unchanged. Going forward, it is hard to see a sustained upturn in consumer confidence in the near term, with Brexit uncertainty intensifying, real wage growth set to remain fairly feeble and tighter financial conditions.
Joe Staton, Client Strategy Director at GfK, commented: “Consumer confidence remains stubbornly sub-zero. And in this environment, any bad news such as a surprising uptick in inflation with the expectation of a corresponding increase in interest rates, or any adverse political event either at home or abroad, would likely have an exaggerated downward drag on consumer confidence.”
Author: Oliver Reynolds, Economist