Public faith in the economy falls, but confidence up
Shoppers look to big purchases
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Friday, 19, Dec 2008 08:55
Public confidence in the state of the UK economy fell further this month.
The GfK NOP UK Consumer Confidence Survey rose two points in December – to the still heavily depressed level of -33 points.
However, confidence on the state of the economy fell a further five points to -41 points. The index measuring the state of the economy over the last 12 months fell one point to -72.
The December 1st cut to VAT did bring some confidence to shoppers though.
The index measuring the climate for major purchases was up ten points to -29.
The interest rate cuts from the Bank of England – taking the base rate to two per cent – severely dented people's intentions to save, the research also showed.
The 'now is a good time to save’ Index dropped by 12 points to -8, this is 41 points lower than December '07.
Rachael Joy at GfK NOP said: “The Consumer Confidence Index has improved again this month after the interest rate cut and the fall in petrol prices, but still continues to hover at near record lows.
"The crucial question for the economy is whether the improvement in the [major purchase] index will be translated into activity on the high street during the January sales."
Meanwhile research from Mintel shows Britons' greatest concern is now their finances – pushing aside crime and migration – as the UK drops its head into the recession vat.
Figures next week from the Office for National Statistics (ONS) are set to show GDP fell for the second consecutive quarter and so mean the UK recession started officially in July.
After a year of financial turmoil in the City, the economic crisis is now hitting the high street.
Mintel found 54 per cent of Brits are now concerned about the state of the economy and 44 per cent are worried about their own personal financial situation.
Crime (41 per cent), immigration (37 per cent) and health (30 per cent) make up the remaining five biggest worries.
At the start of 2008, the greatest fears were immigration and crime while the economy only worried 26 per cent.
"People are now more concerned about the problems that directly impact their day-to-day lives, like money.
"Clearly, when times are bad, most people simply want to focus on looking out for number one," said Jonny Forsyth, senior consumer analyst at Mintel.
He added that while there was talk of financial gloom back at the beginning of the year, it has taken until now for the harsh realities to sink in.
"As a result wider societal problems, such as immigration and crime, now seem far less pressing," Mr Forsyth said.