Data: Consumer confidence tumbles as cost-of-living crisis intensifies

Consumer confidence dropped by seven points in January to -38, according to the latest GfK consumer confidence index.

Overall, the consumer confidence barometer was just one point off the lowest confidence level on record.

With the rising cost of living, consumers were not optimistic about their personal finances over the next 12 months, with the index decreasing by eight points to -26. This is 36 points lower than April 2021 when the UK was in national lockdown. 

Consumer sentiment towards the general economic situation over the past year dropped by nine points to -60, two points lower than the same period last year. 

Economic expectations for the year ahead also declined by six points in April to -55. This figure is 44 points lower than last April and is lower than that recorded by the index during the 2008 financial crash. 

The major purchase index also recorded a decrease of eight points to reach -32 – 20 points lower than the same month last year. This is also lower than that recorded in 2008, as well as during the first Covid wave in 2020.

The savings index also fell by eight points last month to 10 in April.

GfK client strategy director Joe Staton said: “When rising inflation and interest rates meet low growth and declining incomes, consumers will understandably be extremely cautious about any spending. There’s clear evidence that Brits are thinking twice about shopping, as seen in the tumbling major purchase index – now is not considered to be a good time to buy.”

“This is dire news for consumer confidence and with little prospect of any economic relief on the horizon we can only forecast further falls in the index for the year ahead.”