Published
Jun 27, 2017
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UK consumer confidence down but not out says YouGov poll

Published
Jun 27, 2017

UK consumer confidence took a hit in the 12 days after the general election as shoppers stayed cautious in the face of a hung parliament and uncertainty over Brexit negotiations.



But figures for consumer sentiment and for how much British shoppers are fuelling their spending by debt also suggests that there is still a willingness to spend and a general feeling that things will work out for the best - just.

So what about those confidence figures? A regular YouGov poll showed a “pronounced collapse in consumer confidence following the election” dropping from 109.1 in the final pre-election week to 105.2 in the first week after the results were in.

For June as a whole, consumer confidence dropped to 106.9, its second-lowest level since the summer of 2013. The drop mirrored that of a year ago when the Brexit vote caused consumers to think twice about spending.
Coming just after the month of May when pre-election caution kept spending down, these figures piled more bad news onto a a raft of other announcements that have shown a consumer spending growth to be stalling.

YouGov’s poll found that consumers were noticeably less upbeat and were particularly worried the value of their homes could fall should the economy weaken. If that were to happen, it would crimp their ability to raise finance on those homes but might also make them feel less well off and so less likely to spend.

YouGov said any cooling in the property market is a concern “as this is one of the key things that has propped up consumer confidence over the past few years.”

But one thing the latest survey results down’t show is a complete downturn in confidence as a score of more than 100 shows that consumers are still more confident than not, although the current reading means sentiment is edging dangerously close to negative territory.

Photo: Intu - Photo: Intu


Another sign of eroding confidence came in a British Bankers’ Association study that showed growth in consumer spending using loans and credit cards slowed last month as more shoppers avoided getting themselves into debt.

But even here the data wasn’t reflective of consumers acting like they’re completely on the ropes as credit-fuelled spending still rose. It was up 5.1% in May compared to 6.4% in April. Yet while that is high compared to some historical figures, it was the lowest growth for almost the last two years.

The spending that did happen last month appeared to come more at the expense of savings as shoppers dipped into their emergency funds. Annual growth in savings deposits dropped to 2.6% in May, the smallest number in five years.

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