Consumer confidence ‘will remain fragile for some time’

May 21, 2020 11:21:47 PM

Consumer confidence ‘will remain fragile for some time’

Household confidence remains “battered and bruised” despite the easing of some lockdown restrictions and is set to remain fragile for some time, according to an index.

The overall score for data analysis business GfK’s latest UK consumer confidence index was minus 34.

This indicated a deterioration in consumer sentiment, compared with an overall score of minus 33 in findings published two weeks earlier.

The index, which surveyed more than 2,000 people between May 1 and 14 for the latest research, asks people how they feel about their personal financial situation, the wider economy and their attitude towards making major purchases.

While perceptions remained negative, people appeared to have become slightly less downbeat about their personal financial situation over the next 12 months compared with the research published two weeks earlier.

The index score on this measure moved up two points, from minus 11 to minus nine.

But consumers’ expectations for the economy in the next 12 months deteriorated, moving from minus 53 to minus 54.

Attitudes towards making major purchases improved slightly, although they remained negative, changing from minus 49 to minus 47.

Joe Staton, GfK’s client strategy director, said: “At minus 34, consumer confidence remains battered and bruised despite efforts at loosening the Covid-19 restrictions.

“With unemployment claims rising by the highest rate on record and warnings of a severe recession and possible tax hikes, the damage done by the coronavirus pandemic to the UK economic landscape has been laid bare.

“The lower scores we have registered on the general economic situation reflect this and the Government is dampening down expectations of an immediate economic bounceback.

“So, despite plans to get the country up and running, consumers feel we are not out of the woods yet. Confidence will remain fragile for some time and the possibility of another spike in Covid-19 cases as we adapt to the ‘new normal’ is an obvious danger.”