Consumer confidence takes knock as Brexit approaches
According to Growth from Knowledge's (GfK) consumer confidence index, there has been a drop in confidence across the board, with all five metrics falling ahead of Brexit.
The overall index score dropped to -14 from -11 in July, and -7 in August 2018. Those who believed their personal financial situation over the past 12 months had been positive fell to -1, and anticipation about the coming year fell to +2 from +7 in July.
The index showed signs of recovery in July, as part of a summer boost. Scores on financial situation over the last year and prospective financial situation over the next 12 months sat at at +1 and +7 respectively. However, with more bad news about Brexit and further political upheaval, this relative optimism seems to have been dashed.
GfK has expressed concerns that we could reach the same lows that followed the financial crisis more than a decade ago.
Joe Staton, Client Strategy Director at GfK, said: “Until Brexit leaves the front pages - whenever that will be - consumers can be forgiven for feeling nervous not just about the wider economy but also about their financial situation. That’s an important distinction because a significant development in August is the sudden drop in views on personal finances ‘over the next 12 months’ after the encouraging jump in this measure last month.
"For a long time, the downward momentum in the Overall Index Score has been associated with our views on economy. But reduced confidence is now affecting how we see our personal finances.
"If there is a continuation of that dip in our feelings about our ‘future wallets’, we’d quickly see a headline score (the average of our five sub-measures) crash to a level that approaches the worrying figures seen in the worst days of the 2008/2009 financial crisis.
"We are not there yet, and we may not necessarily get there, but it’s a trend we need to watch carefully.”
The survey, which has tracked the sentiments of consumers since the mid-70s, is conducted on behalf of the EU in each European country.