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UK consumer confidence hits worst level in more than a decade - GfK

By Michele Maatouk

Date: Friday 05 Jun 2020

UK consumer confidence hits worst level in more than a decade - GfK

(Sharecast News) - UK consumer confidence fell in May to its worst level since January 2009 as the Covid-19 pandemic continued to weigh, according to a survey out on Friday.
A "flash" report by GfK using data gathered between 20 and 26 May showed the long-running consumer confidence index fell by two points to -36, with four out of five of the measures that make up the index down. This was just three points below the historic low of -39 in July 2008.

The index tracking people's financial situation over the last 12 months declined six points to -10, while the index tracking the situation over the next year edged down one point to -10.

The gauge tracking the general economic situation over the last year declined to -60 from -55, while the index for the general situation over the next year came in at -57 compared to -54 previously.

The major purchase index rose six points to -41.

Joe Staton, client strategy director at GfK, said: "Against a backdrop of falling house prices, soaring jobless claims, and with no sign of a rapid V-shaped bounce-back on the cards, consumers remain pessimistic about the state of their finances and the wider economic picture for the year to come.

"The only bright spark in the numbers is for the major purchase index with a six-point fillip, pointing to latent demand among shoppers across the UK despite most outlets remaining shuttered. As the lockdown eases, it will be interesting to see just how the consumer appetite for spending returns in a world of socially-distanced shopping and the seismic shift to online retailing - alongside worries of a fresh spike in Covid-19 cases as relaxations increase."

Shore Capital said: "Many businesses are still closed, and the majority of those who are operating are suffering to maintain a low demand and high operating cost model. This has led to severe cost-saving measures and as a result, the UK Consumers are faced with furlough schemes and redundancies, creating a vicious circle of financial and general economic worry.

"However, some of the lockdown restrictions have now begun to ease, or show hope of easing over the coming weeks, and we will watch with interest how consumers adapt to social-distance shopping and how many will make a permanent switch to online spending."

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