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Published on September 24th, 2021 | by The GC Team

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Consumer confidence depressed by “perfect storm”

Consumer confidence fell back by five points in September with all measures used to calculate the monthly Index taking a turn for the worse and indicators pointing to harsher times ahead.

The economic impact that Brexit – and inadequate measures to plan for the UK’s EU exit – and coronavirus have thrust upon the nation has become a growing reality. Top that off with the energy crisis and you have, as our MPs like to put it, “the perfect storm”.    

There is no glossing over consumers’ anxieties. GfK’s monthly Consumer Confidence Index fell to -13 in September. The score for Personal Finances over the next 12 months dropped by six points; the General Economic Situation for the same period fell ten points; and the Major Purchase Index was down three points – a sign that consumers are retrenching in the face of a prophesised “Winter of Discontent”.

“On the back of concerns about rising prices for fuel and food, the growth in headline inflation, tax hikes, empty shelves and the end of the furlough scheme, September sees consumers slamming on the brakes as those already in economic hardship anticipate a potential cost of living crisis,” said Joe Staton, Client Strategy Director GfK.

“All measures have declined this month and consumers are clearly worrying about their personal financial situation and the wider economic prospects for the year ahead. The Index also records a fall in the major purchase index: depressing news for hard-pressed retailers looking to build sales as they go into the key holiday period.

“When consumer confidence drops, shoppers tend to spend less, and this dampens the overall economic prospects for the UK. This really is an unwelcome picture if this continues into 2022 and beyond.”

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