You are in > manchester.com  > News > Consumer confidence hits lowest since recession

Finance

Consumer confidence hits lowest since recession

30/06/2008

Consumer confidence in the UK has dropped to its lowest level since March 1990 when the UK was headed into recession, surveys released today have shown.

The GfK NOP index – used by the Bank of England - has dropped by a further five points to -34 in June, only one point higher than the -35 reached in March 1990.

Rachel Joy, from GfK NOP's consumer confidence team, said: "This month the index score continues to tumble and is almost at its lowest level since the survey began in 1974.

"With rising inflation, gloomy forecasts for interest rates and soaring fuel, utility and food prices dominating the front page headlines, it's no surprise that confidence in the general economy is almost in freefall. It seems unlikely that this trend will reverse in the near future."

The major purchases measure has fallen by three points, from -32 to -35; 41 points lower than this time last year and the lowest score on record.

The decline matches figures from the high street, as retailers of big-ticket items such as white goods have seen steep sales declines over the last few months.

Expectations for the general economic situation for the next 12 months are also the lowest on record, falling five points to a score of –66, a massive 42 points lower than this time last year. This score has not been this low since December 1992 when it was -67, GfK NOP said.

Another consumer survey released today from Lloyds TSB shows job security and employment confidence have fallen to their lowest level since the survey began in November 2004.

The survey also shows people's expectations of inflation have risen to 4.8 per cent.