Consumer confidence is falling to its lowest level since 1974

For May, the index decreased by two more points to -40, as four of the five measures that make up the index decreased.

He revealed that the index measuring changes in personal finances over the past 12 months has fallen by three points to -22. This is 18 points worse than the same period in 2021.
The forecast for personal finances managed to rise by one point to -25, but this is 35 points lower than last year.

In particular, the indicator of the general economic situation of the country in the last 12 months decreased by three points to -63; this is 15 points lower than in May 2021. In addition, expectations for the general economic situation over the next 12 months fell by one point to -56, down from 60 points compared to the same period last year.

GfK added that the index of major purchases also fell by three points to -35 in May, and the savings index is stagnant at +10 – 12 points lower than last year.

Joe Staten, Client Strategy Director, GfK says: “GfK’s consumer confidence barometer recorded a headline score of -40 in May, the worst since our records began in 1974. This happens when unemployment in the UK reaches 50- year-on-year bottom, and job vacancies are more than the number of first-time job seekers, and inflation peaks to a 40-year high due to rising food and fuel bills.

“May’s score is one point lower than the previous record set in July 2008, when the title fell to -39. This means that consumer confidence is now weaker than in the darkest days of the global banking crisis, the impact of Brexit on the economy or the suspension of Covid.

He added: “Consumer pessimism is most evident in the depressed measures of the overall economy at -63 last year and -56 next year. The index of main purchases decreased for each of the last six months and is now at -35, reflecting the latest grim data on retail sales.

“Even the Bank of England is pessimistic, with Governor Andrew Bailey offering no hope of tackling inflation this week. The outlook for consumer confidence is bleak and nothing on the economic horizon shows any reason for optimism any time soon.

“Consumers are increasingly looking for lower prices and offers. But retailers facing their own rising inflationary pressures will find it harder to secure them.

“Maintenance costs, of course, feel narrower for some consumers than for others. Among those we surveyed: a third of consumers who started 2022 with savings are immersed in them to help cover their monthly basic expenses. But two-thirds of savings consumers still plan to spend a little on what they want in 2022. It seems vital for Main Street to keep this group ready and able to spend in the coming months. ”