Somewhat surprisingly, consumer confidence slipped June as people became increasingly concerned about the economy and their own personal finances.
GfK’s Consumer Confidence Index fell by three points on last month to -13, a level already recorded four times this year.
All five measures used to calculate the index decreased in June. The measure for expectations for the general economic situation over the next 12 months fell by four points to -33; this is eight points lower than June 2018.
Meanwhile, the measure for the forecast for personal finances for the same period dropped by three points to +2; a four point decline on the same month last year.
In a blow to retailers, the major purchase index decreased three points to -2, suggesting people are less likely to make a big buy, such as furniture or electrical goods.
Joe Staton, Client Strategy Director at GfK, commented: “While UK consumers continue to remain concerned about the wider economy, over which the woman or man in the street has no control, of greater worry are the falls in the measures for personal finance. These better reflect our hopes and fears for our everyday financial futures and this, coupled with a decline in the Major Purchase Index, could point to a turbulent time for the economy over the summer months.
“Another trend to watch, even though it’s not included in the Overall Index Score, is the Savings Index – up for the third month in a row at +19. Despite more of us agreeing that ‘now is a good time to save’, the official savings ratio (the percentage of disposable income being saved) stands at near historic lows as households must either dip into their savings or go into debt to fund the cost of day-to-day living. This is important because, without the security of a savings buffer, consumers may well be unable to absorb the impact of any downturn a no-deal Brexit might deliver.”
NAM Implications:
- All of this spells flatline…
- …with any growth coming at the expense of competition.
