Thursday, February 2

UK Consumer Confidence Plummets on Cost of Living Fears

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(Bloomberg) —

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UK consumer confidence fell in February by the most since coronavirus lockdown restrictions were first announced in March 2020 a cost-of-living crisis gained attention.

GfK’s monthly consumer confidence index, which is closely followed by the Bank of England and the Treasury, dropped 7 points in February to minus 26. Its index tracking sentiment toward personal finances for the coming year tumbled to its lowest since April 2020.

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“There’s clear anxiety in these findings as many consumers worry about balancing the household books at the end of the month without going further into debt,” said Joe Staton, client strategy director at GfK. “The good news on the easing or lifting of Covid restrictions around the UK seems to be doing little to lift the public’s mood.”

Households are bracing for a big hit in April, when energy bills may rise by 50% and the Treasury takes more tax from paychecks to pay for health care. For the typical UK household on an annual income of 27,000 pounds ($24,000), the twin shock will cost about 1,200 pounds a year. Include the prospect of a third interest rate rise from the Bank of England in March, and Staton said consumers face “a perfect storm of worries.”

GfK surveyed 2,000 people between Feb. 1 and Feb. 14.

Read more:

The UK Is Two Months Away From a Brutal Cost-of-Living CrisisU.K. Inflation Overshoot Adds to Brutal Cost of Living SqueezeBritons Face Record Energy Bill Surge, Forcing Government to Act

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