LONDON (Reuters) – British consumer confidence sank to levels last seen in late 2020 this month due to worries about galloping inflation, higher interest rates and the war in Ukraine, a survey showed on Friday.
The GfK Consumer Confidence Index fell for the fourth month in a row to -31 from -26 in February, its lowest since November 2020, deep in the coronavirus pandemic.
Readings of -30 and below have presaged recession on four out of five occasions since the survey started in 1974.
The survey’s gauge of personal finances for the coming year slumped to a joint record low, matched only by July 2008 when the global financial crisis was reaching a climax.
“A wall of worry is confronting consumers this month and there is an unmistakable sense of crisis in our numbers,” Joe Staton, GfK’s client strategy director, said.
“Confidence in our personal financial situation and in the wider economy are severely depressed while the daily news of unimaginable suffering from a horrifying war in Europe and rising COVID numbers at home is adding to the bleak mood.”
Britain’s consumer price inflation rate is heading for 9% later this year, the government’s budget watchdog said this week, as it predicted living standards in 2022 would fall by the most since at least the 1950s.
The BoE has raised its benchmark Bank Rate three times since December and financial markets expect it to increase it again to 1.0% in May, even as the economy heads into a slowdown.
GfK’s measure of how willing people are to make big purchases tumbled by nine points to -24.
British retailers saw their sales fall this month as the cost-of-living squeeze tightened, a separate survey by the Confederation of British Industry showed on Thursday.
The survey of 2,000 people was conducted March 1-14.
(Reporting by William Schomberg, editing by Andy Bruce)
