Rising household costs and falling property values have pushed consumer confidence levels to a record low, a survey has suggested.
Almost a third of respondents to the British Retail Consortium’s (BRC) Consumer Confidence index said the economy was their most major concern, while 57% were worried their financial situation would deteriorate over the next 12 months.
Mike Watkins, senior manager of Retailer Services at market research company Nielsen, said: “The UK Consumer Confidence index now stands at 79. To put this into context, this time last year the index stood at 91, which was the lowest score we had seen since we began the survey in 2003.
“The fact that the score has plummeted a further 12 points is telling of how much consumers are being stretched,” he added.
Three quarters of respondents said now is ‘not a good time’ to spend money, while 55% ranked inflation as their main concern during periods of economic downturn, with high interest rates coming second, at 40%.
Watkins said consumers are being hit by both inflation and high interest rates. “This has caused significant unease among consumers,” he added.
Stephen Robertson, director general of the BRC, said it is clear retailers are seeing the effects of consumers’ concerns about the future and the levels of their own debt.
“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,” he said.
“Clothes, footwear, furniture and new technology are the biggest casualties as consumers attempt to manage their money.”
© Crimson Business Ltd. 2008
