UK Consumer Confidence Plunges to Thirteen Year Low

29 February 2008

LONDON: According to the latest monthly UK Consumer Confidence Survey, conducted by GfK NOP on behalf of the European Commission, Britons this leap year day are gloomier about the national economy than at any time since December 1994.

The overall confidence index score for February dropped four points to minus 17; while the five measurement segments that comprise the overall score collectively fell six points to -19.

  • Consumer Confidence
    The four-point decrease in the overall index score this month – now nine points lower that this time last year - has been caused by a drop across all five measures, particularly in the ‘major purchases' climate. The annual moving average has dropped to -8. 
  • Personal Financial Situation
    The index measuring changes in personal finances during the last year has dropped by three points to a score of -1; this is one point lower than in February last year. There has also been a slight drop in the forecast for personal finances over the next year, which has come down one point to a score of +6; four points lower than in February '07. 
  • General Economic Situation(Past)
    The measure for the general economic situation of the country during the last twelve months dropped to a score of –40; this is seven points lower than February last year. This score has not been this low since April '93 when it was -51. 
  • General Economic Situation(Ahead)Expectations for the general economic situation over the next twelve months have dropped to -29; eight points lower than in February ‘07. This score has not been this low since November '92, when it was -30. 
  • Climate for Major Purchases
    The major purchases measure has dropped by six points, from -13 to -19; this is twenty-three points lower than in February '07. This level of depression has not been seen since December 1990 when the score was -21. 
  • Savings Index
    The ‘now is a good time to save' Index has dropped slightly by two points to +28; seven points lower than in February ‘08.
Comments GfK NOP's Rachael Joy: "This month's drop in consumer confidence comes in spite of the cut in interest rates earlier this month.

"Consumers are feeling a little less confident about their own personal finances and much less confident about the general economy as a whole. This may have been fuelled by the wide reporting on a housing market slowdown, high fuel and energy prices and rising food prices.

"These factors all squeeze budgets, causing consumers to be much less confident about making major purchases."

The survey data are based on interviews with a sample of 2000 individuals aged 16+ during the period 8-17 February.

Data sourced from GfK NOP; additional content by WARC staff