British households’ confidence in their financial outlook has fallen to its lowest in eight years, stated a report on Wednesday (9) as amid the ongoing cost of living crisis.
Polling company YouGov and economic consultancy Cebr have reported that consumer confidence dropped this month to the lowest since last March, as people worry about rising prices, tax increases and their job security.
The index of households’ expectations for their financial situation in 12 months’ time tumbled by 4.5 points to 79.1, the lowest since October 2013.
The drop in consumer confidence highlights the impact of the rising cost of living on household sentiment, says Cebr expert.
“Away from the headline indicator, consumers’ assessment of their finances over the coming year provides for a particularly stark reading – reaching a near nine-year low. Rising inflation and the planned uplift to National Insurance contributions are just two likely factors behind this weaker outlook,” said Sam Miley, senior economist at Cebr.
“This sentiment is also mirrored in Cebr’s latest forecasts, with real disposable incomes expected to fall year-on-year and the household savings ratio set to narrow significantly.”
Consumer price inflation in December hit an almost 30-year high of 5.4 percent and last week the Bank of England said it looks likely to peak at around 7.25 percent in April.
The fall in the headline index was limited by a rise in its house price component to the highest since September 2014.
Miley said the survey’s reading for household finances was “particularly stark” and he cited plans to raise taxes on working people as another reason why people were feeling strain on their budget.
Other measures of consumer confidence from GfK and Bank of America have also declined recently.
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