Survey Suggests Consumer Confidence Rose Last Month Despite Cost Of Living Crisis

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 Namnews, 10th August 2022

Consumer confidence in the UK surprisingly improved in July after seven straight months of decline.

This is according to the latest consumer confidence index by YouGov and consultancy Cebr, which rose 2 points last month, possibly reflecting the introduction of support payments for low-income households.

The survey comes just days after the Bank of England (BoE) said the UK would enter a recession by the end of 2022 and gave a grimmer outlook for inflation, projecting consumer prices would rise more than 13% in October.

The YouGov/Cebr survey was carried out before the Bank’s forecasts were announced.

YouGov and Cebr said the first instalment of one-off government payments to millions of low-income households struggling with soaring costs of living helped with an uptick in household finance measures.

Business activity also saw improvements, with employees slightly more likely to report that their workplaces are busier than they were last month and more likely to expect them to get busier in future. Perceptions of job security among UK workers also inched up.

However, YouGov and Cebr noted that the overall public mood around household finances remained downbeat.

Kay Neufeld, head of forecasting at CEBR, said: “The first increase in the consumer confidence index since November 2021 provides a welcome reprieve after a torrid string of declines saw sentiment plummet by more than nine points over the past seven months.

“Noticeably, the strongest upward momentum in July came from the backward and forward-looking household finance indicators.

“Nevertheless, the increases in these measures are from an extremely low base, and the outlook remains challenging. While the first cost-of-living payments have started to arrive, questions remain regarding the type of support households can expect over the coming months, with the energy price cap set to rise to new record highs in October and January next year.

“Further headwinds will emerge as the UK economy is expected to teeter on the brink of recession in the second half of the year, suggesting the spike in consumer confidence may prove short-lived.”

NAM Implications:
  • NAMs unfortunately have to work with personal perception of the future state of consumer confidence…
  • …and it’s resulting effect on shopping behaviour.
  • Which has to mean fully factoring in 13% inflation, minimum…
  • …and anticipating a deep recession lasting five years, minimum.

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