 Shoppers are cutting back, data shows |
Rising prices and falling property values have sent consumer confidence in the UK to record lows, according to the British Retail Consortium. People were feeling more glum than ever about job prospects, personal finances and spending capabilities, the BRC's survey suggested, Inflation was the biggest concern of those quizzed (55%), while more than one-third cited high interest rates. The Consumer Confidence index is at 79 - from 91 a year ago. "Unfortunately consumers are being hit with both inflation and high interest at present and this has caused significant unease," said Mike Watkins, a senior manager at Nielsen which did the research for the BRC. 'Cutting back' The fall in consumer confidence could be put down to a combination of "increasingly negative" sentiment about job prospects, personal finances and personal spending power, the report said. Just under six in 10 of the 1,000 respondents said they felt that their own personal finances would be either bad or not so good over the coming year, compared with 46% six months ago. And three-quarters felt that now was not a good time to spend on things they wanted or needed, the report added. "With one in five people saying they have no spare cash - the highest ever recorded by this survey - customers are telling us they are cutting back on spending on all sorts of non-essentials," said BRC director general Stephen Robertson. "Clothes, footwear, furniture and new technology are the biggest casualties as consumers attempt to manage their money. "It's clear we are seeing the effects of customers' concerns about the future and about their own levels of debt." The latest data from the High Street showed that UK retail sales fell for the second consecutive month in April, the first time this has happened for more than two years. Sales were down by 0.2% following March's 0.4% decline, according to the Office for National Statistics. And the Chartered Institute for Purchasing and Supply said Britain's service sector shrank in May for the first time in five years as costs rose and confidence in business prospects fell. The latest data puts UK inflation at 3%, driven by soaring food and fuel prices. And, while the Bank of England has held interest rates, some mortgage lenders have increased their rates, making life more expensive for some homeowners.
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It's clear we are seeing the effects of customers' concerns about the future and about their own levels of debt.
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