UK consumer sentiment continues to decline
2023.01.23 08:45
UK consumer sentiment continues to decline
By Ray Johnson
Budrigannews.com – According to research released on Friday, concerns about the economy and the skyrocketing cost of living strained household finances in January, causing consumer sentiment in the United Kingdom to decline for the first time in four months and return to near-historic lows.
GfK, a market research firm, reported that its confidence index dropped by three points to -45, marking the third-lowest reading since records began in 1974. An economist survey conducted by Reuters anticipated a rise to -40 from December’s -42.
January typically sees a rise in the non-seasonally adjusted GfK index.
This month, major purchases were particularly negatively viewed.
The results of the survey show how households in the UK are being affected by rising costs and economic uncertainty, as more people say their personal finances are getting worse.
In recent months, household incomes have been decimated by rapid increases in energy and food costs.
The Office for National Statistics reports that in December, food prices increased by 16.8% year-over-year, the sharpest increase since September 1977.
From April, the average energy bill for a household in Britain will cost 3,000 pounds ($3,697) per year.
The previous leader, Liz Truss, had promised a two-year energy support program for households that would have kept annual bills at 2,500 pounds. However, Prime Minister Rishi Sunak and Finance Minister Jeremy Hunt reduced the program.
Joe Staton, the director of client strategy at GfK, stated, “With inflation continuing to swallow up pay rises and the prospect of some shocking energy bills landing soon, the forecast for consumer confidence this year is not looking good.”
Britain’s economy could slow down as the threat of recession lingers, as evidenced by a six-point drop in the sub-index of consumers’ willingness to make costly purchases.
Financial markets anticipate that the Bank of England will increase its key interest rate from 3.5% in February to 4%, despite the fact that British inflation eased last month after reaching a 41-year high in October. In an effort to bring inflation back to its target of 2% after nine meetings, the central bank increased rates.
Between January 3 and 12, 2000 people participated in the survey.
