UK consumer confidence crashes as shoppers are wary of economic hardship

UK consumer confidence is in freefall as shoppers are wary of increasing costs and economic hardship.

Figures from GfK’s long-running Consumer Confidence Index decreased seven points to -38 in April, with participants being asked ‘How has the financial situation of your household changed over the last 12 months?’

Situation worse than 2008 financial crash

Joe Staton, Client Strategy Director GfK, said: “The cost crunch is really hitting the pockets of UK consumers and the headline confidence score has dropped to a near historic low. The scores looking at the next 12 months for our personal finances at -26 and the general economy at -55 are worse than the 2008 financial crash.

“The personal finance score for the next year is also worse than the initial Covid shock in 2020. 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.”

KPMG in a press release on Friday echoed Gfk's data, stating a third of consumers are buying less so far in 2022, with clothing the most common cost cutting target.