UK Consumer Confidence falls to 13-year low as fears grow about recession

Consumer Confidence drops to a thirteen year low.

• Confidence among UK Consumers has fallen to a 13-year low as fears grow about recession.
• The Index score this month is now at its lowest since December 1994, with a drop of four points to -17.

• All five measures have recorded drops, including the major purchase index, which dropped six points to -19.

Rachael Joy in the Consumer Confidence team at GfK NOP commented:

"This month’s drop in Consumer Confidence comes in spite of the cut in interest rates earlier this month. Consumers are feeling a little less confident about their own personal finances and much less confident about the general economy as a whole. This may have been fuelled by the wide reporting on a housing market slowdown, high fuel and energy prices and rising food prices. These factors all squeeze budgets, causing Consumers to be much less confident about making major purchases. ”

Consumer Confidence Measures – February 2008

The four-point decrease in the overall index score this month – now standing nine points lower that this time last year - has been caused by a drop across all five measures, particularly in the ‘major purchases’ climate. The annual moving average has dropped to -8.  

Personal Financial Situation

The index measuring changes in personal finances during the last year has dropped by three points to a score of -1; this is one point lower than in February last year. There has also been a slight drop in the forecast for personal finances over the next year, which has come down one point to a score of +6; four points lower than in February ’07.

General Economic Situation

The measure for the general economic situation of the country during the last twelve months dropped to a score of –40; this is seven points lower than February last year. This score has not been this low since April ’93 when it was -51.

Expectations for the general economic situation over the next twelve months have dropped to -29; eight points lower than in February ‘07. This score has not been this low since November ’92, when it was -30.

Climate for Major Purchases

The major purchases measure has dropped by six points, from -13 to -19; this is a twenty-three points lower than in February ’07. This level of depression has not been seen since December 1990 when the score was -21.

Savings Index

The ‘now is a good time to save’ Index has dropped slightly by two points to +28; seven points lower than in February ‘08.