UK consumer confidence continues to decline

UK consumer confidence has continued to decline, and is now close to the level it was at immediately after the Brexit referendum, according to a new survey.

The YouGov/Cebr Consumer Confidence Index declined by -0.2 points to 107.9 in May, the lowest level since July 2016.

YouGov interviews 6,000 people every month and asks them about confidence in household finances, property prices, job security and business activity, both over the past 30 days and looking ahead to the next year.

House values

Two of the eight measures increased in May, but five have fallen and one is flat. Homeowners’ expectations for property prices over the past month are unchanged, and they have become slightly more optimistic about house values over the coming year.

The underlying strength of property prices is the main issue giving confidence to consumers.

The most concerning aspect to householders is the continuing decline in people’s financial situation over the past 30 days.

As consumers start to feel the effects of rising inflation, this slipped to the lowest level since December 2014, while expectations for household finances over the next 12 months also fell.

Confidence in job security also fell to its lowest level since April 2013.

Slowdown

Nina Skero, head of macroeconomics at the Cebr, said: “Consumer confidence continues to decline and every month it is getting closer to the level it was at immediately after the EU referendum.

“The most concerning aspect in the numbers is the continuing decline in people's household financial situations.

“Both forward and backward-looking measures are at their lowest level for a number of years and it doesn't take much for a tightening of purse strings to lead to a slowdown in the economy.”

Downturn

Stephen Harmston, head of YouGov Reports, said: “After several jolts over the past year, consumer confidence is now treading a straighter path, albeit one that heads gently downwards.

“It looks like this may be the point where the slowing GDP figures start to translate to people's everyday lives.

“The figures indicate that they are starting to experience a downturn, as shown by the fall in both household finances and job security over the past 30 days.

“Property prices remain resolute, but they are currently the main thing giving consumers confidence.”