UK consumer confidence “continues to nosedive” as surging inflation causes a cost-of-living crisis, a survey revealed Friday, as the government faces pressure to better ease the financial pain.
GfK’s Consumer Confidence Index fell five points to minus 31 in March – a fourth monthly drop in a row, as separate official data showed a fall in UK retail sales.
The last time consumer confidence was this low was in the final quarter of 2020 when Covid numbers were rising, the data analyst group added.
“A wall of worry is confronting consumers this month and there is an unmistakable sense of crisis in our numbers,” said Client Strategy Director GfK, Joe Staton.
“Consumers across the UK are experiencing the impact of soaring living costs with 30-year-high levels of inflation… against a background of stagnant pay rises that cannot compensate for the financial duress.”
Staton said that confidence in people’s personal financial situation and in the wider economy were “severely depressed” also owing to the Ukraine war and rising Covid numbers across the UK.
“The outlook for consumer confidence is not good; it’s certain there’s more bad news to come,” he predicted.
The GfK survey, conducted on 2,000 people aged above 16, came as official data showed UK retail sales dropped in February as soaring inflation put the brakes on most purchases.
Sales volumes contracted by 0.3 percent last month compared with January, the ONS said.
“The squeeze on household budgets is set to worsen over the coming months, exerting further downward pressure on retail sales,” said Karl Thompson, economist at Centre for Economics and Business Research.
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