Consumer confidence close to record low

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Research from GfK shows consumer confidence dipped two points to minus 36, just three points above the record low of minus 39 in July 2008, as house prices fell, and unemployment rose.

Consumers’ confidence in their personal financial situation over the last 12 months fell by six points and their confidence in the general economic situation over the past year fell by five points.

However, the Major Purchase Index – which asks shoppers how confident they feel making large purchases such as furniture or electrical goods – rose by six points.

Joe Staton, GfK’s client strategy director, said “GfK’s third Covid-19 flash report records drops across key measures to -36, just three points shy of the historic low of -39 in July 2008. Against a backdrop of falling house prices, soaring jobless claims, and with no sign of a rapid V-shaped bounce-back on the cards, consumers remain pessimistic about the state of their finances and the wider economic picture for the year to come. The only bright spark in the numbers is for the Major Purchase Index with a six-point fillip, pointing to latent demand among shoppers across the UK despite most outlets remaining shuttered. As the lockdown eases, it will be interesting to see just how the consumer appetite for spending returns in a world of socially distanced shopping and the seismic shift to online retailing – alongside worries of a fresh spike in Covid-19 cases as relaxations increase.”

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