Business

Consumer confidence falls to new record low amid signs of looming recession

GfK's long-running Consumer Confidence Index hit a new record low in June.

CONSUMER confidence has fallen to its lowest level since records began in 1974 as a "stark new economic reality" hits households, figures show.

GfK's long-running Consumer Confidence Index dropped one point to minus 41 in June, setting a new record low for a second successive month.

Confidence in personal finances over the next 12 months fell three points to minus 28 - 39 points lower than this time last year.

Expectations for the general economic situation over the coming year also dropped, by one point to minus 57 - 55 points lower than last June.

The major purchase index, a measure of confidence in buying big ticket items, remained at minus 35, taking it to 30 points below last June's figure.

It comes one day after a report revealed plummeting business confidence, adding to mounting signs of a looming recession.

The latest S&P Global/CIPS flash UK purchasing managers index (PMI) survey showed business expectations suffered the largest monthly decline since the start of the pandemic, with manufacturers and services firms reporting the lowest degree of business optimism since May 2020.

S&P warned such a low level of business optimism has historically "signalled an imminent recession" is on its way.

The preliminary PMI reading, which covers the manufacturing and services sectors, indicated that growth remained at its lowest level for more than a year in June.

Commenting on its latest consumer analysis, GfK’s Joe Staton said: "With prices rising faster than wages, and the prospect of strikes and spiralling inflation causing a summer of discontent, many will be surprised that the index has not dropped further.

"The consumer mood is currently darker than in the early stages of the Covid pandemic, at the result of the 2016 Brexit referendum, and even the shock of the 2008 global financial crisis, and now there's talk of a looming recession.”

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