Consumers remain downbeat in UK

23 June 2010

LONDON: Consumer sentiment in the UK has fallen to a low not seen since the peak of the economic downturn, a new study has argued.

According to figures released by Markit and YouGov, 44% of households in the country expect their financial circumstances to get worse over the course of the next year.

This compared with just 22% who believed their personal situation would improve in this period.

Such a trend builds on a similarly negative evaluation of the climate in June, when 27% of households thought their position had deteriorated and 7% agreed it had got better.

This marked the third successive month when respondents had become more concerned about the fiscal outlook, a development related to a decline in confidence in their overall job security.

Tim Moore, an economist at Markit, said: "UK households are becoming increasingly concerned about the potential headwinds threatening their finances.”

"The survey shows the greatest degree of pessimism since the recession was in full swing early last year."

Many people have thus attempted to heighten their savings rate, with 17% of participants reporting their total debt had decreased and 14% that it had grown.

While shoppers boosted their spending slightly in June, Moore suggested popular habits in this area are likely to remain in flux for the foreseeable future.

"The spread of anxiety amid talk of looming austerity measures suggests a growing risk of renewed weakness in the consumer sector," he said.

Data sourced from Associated Press; additional content by Warc staff