LONDON: UK consumer confidence has fallen to its lowest level since the early-1990s recession, with perceptions of economic health the worst in fifteen years.
Moreover, willingness to make major purchases (like washing machines and furniture) is at at a nadir, according to market researcher GfK NOP.
The firm's latest data reveal overall consumer confidence fell by five points to minus 29 in May, driven down by declining house prices and rises in food, energy and petrol costs.
Ratings for the general health of the economy also declined by by five points to minus 58, some 27 points down year-on-year.
The index has now fallen 40 points in the last twelve months to a low last recorded in February 1993.
Comments GfK NOP's Rachael Joy: "Consumers' confidence in the economy over the next year, plus a reluctance to make major purchases, reflect the popular expectation of a recession – both these measures are at the lowest level on record."Meantime, mortgage lender Nationwide estimates that house prices fell 2.5% last month – the biggest monthly reverse in over a decade – while Citigroup says they have fallen by 11.4% in the last six months.
Adds the latter's Michael Saunders: "Consumer confidence already has plunged and surveys suggest retail sales growth is weakening very sharply.
"Worse lies ahead as the lagged effects of housing come through, as well as the erosion of real incomes from rising inflation and mounting job losses. The UK economy is heading close to recession."
Data sourced from Guardian.co.uk; additional content by WARC staff