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Published on April 1st, 2020 | by The GC Team

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Viral Britain: consumer confidence on downward trajectory

Consumer confidence started to track a downward path again in March as the presence of COVID-19 spread throughout the UK.

Following a run of increasingly positive numbers since last December and a “mini Boris-bounce” of two points in the first month of this year followed by a further two-point gain in February, the confidence index fell by two points in March to -9.   

The research used to compile the index was carried out during the first two-weeks of the month when the coronavirus was headline news but the closure of businesses deemed “non-essential” and social distancing had not been implemented.

Unsurprisingly though, even at that point, the forecast for personal finances over the next 12 months fell three points, and the measure for the general economic situation of the country decreased by a whopping six points.

Worryingly for retailers is the steep eight-point fall recorded for the Major Purchase Index in March.

With the UK now essentially in lockdown, and The Corporate Finance Network, which represents a network independent accountancy firms, predicting that in the next four weeks, as a result of the COVID-19 lockdown, 18% of all SMEs will not be able to survive – despite the support measures currently announced by the Government – and almost four million people will lose their jobs, we may well see consumer confidence fall to what amounts to an all-time low.

Joe Staton, Client Strategy Director at GfK, which compiles the Consumer Confidence Index, was relatively cautious in his outlook: “While we have a long way to drop before we match the devastating numbers seen in July 2008, when the Overall Index Score crashed to -39 points, we are likely to suffer further deterioration now that we are in lockdown in Britain.”

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