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UK consumer mood sinks to new depths despite energy bills help
Global Banking & Finance Review®
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By Andy Bruce
LONDON (Reuters) – British consumer confidence slid this month to its lowest level since records began in the mid-1970s, with scant sign of any boost from Prime Minister Liz Truss’s announcement of additional support for households.
The consumer confidence index from market research firm GfK fell to -49 in September from -44 in August, worse than all forecasts in a Reuters poll that pointed to an improved reading of -42.
Readings of -30 and below have presaged recession on four out of five occasions since the survey started in 1974.
The survey straddled both Truss’s statement on capping household energy bills and the death of Queen Elizabeth on Sept. 8 but GfK recorded no significant change in responses after that date.
Overall, the readings underlined the precarious state of Britain’s economy hours before new finance minister Kwasi Kwarteng updates parliament on measures to help households and businesses.
Joe Staton, client strategy director at GfK, said rock-bottom readings for the survey’s forward-looking gauges were especially worrying. The survey follows much weaker-than-expected retail sales data for August.
“Consumers are buckling under the pressure of the UK’s growing cost-of-living crisis driven by rapidly rising food prices, domestic fuel bills and mortgage payments,” Staton said.
GfK’s gauges of economic and personal financial confidence each fell to their lowest level since comparable records from the European Commission began in 1985.
Staton said consumers will be anxious to hear what Kwarteng says on Friday.
“It will also be a major test for the popularity of Liz Truss’s new government.”
Truss announced on Sept. 8 that Britain will cap consumer energy bills for two years and funnel billions to prop up power companies.
(Reporting by Andy Bruce, editing by William James)
Consumer confidence is a measure of how optimistic or pessimistic consumers are regarding their expected financial situation and the overall economy. It influences spending and saving behaviors.
The consumer confidence index is a statistical measure that gauges the degree of optimism consumers feel about the overall state of the economy and their personal financial situation.
A recession is an economic decline characterized by a decrease in GDP, employment, and consumer spending, typically lasting for at least two consecutive quarters.
Energy bills refer to the monthly charges for electricity, gas, or other energy sources used in homes and businesses. They can significantly impact household budgets.
The cost-of-living crisis occurs when the prices of essential goods and services rise significantly, leading to increased financial strain on households and individuals.
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