British consumer confidence has plunged to its lowest level since records began nearly 50 years ago, according to a closely-watched survey, adding to fears that the economy will be hit by a large slowdown in consumer spending
The gloomy GfK study, which covers May, suggests that things like the unprecedented hike in the energy price cap in April had now hit sentiment as the higher bills are being paid - on top of rising costs for other staples, including food and fuel.Consumer confidence is now weaker than in the darkest days of the global banking crisis, the impact of Brexit on the economy, or the COVID shutdown.
"The outlook for consumer confidence is gloomy, and nothing on the economic horizon shows a reason for optimism any time soon," he said. "Consumers are now able to see what the rise in the energy price cap, the rise in NICs [National Insurance contributions] rates and the freeze in income tax allowances and thresholds means for their finances," he told Sky News.for the month of April.Mr Goodwin said consumers are likely to"feel the pinch" for some time, and there are already signs that consumers are beginning to cut back on spending.
"We see only limited scope for lower saving to cushion the blow so, given the government remains unwilling to provide additional support, the squeeze on household finances will be so great that it's hard to see how we can avoid falling consumer spending.
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