–GfK/NOP: UK May Consumer Confidence -18 Versus -16 April

LONDON (MNI) – UK consumer confidence hit its lowest level so far
this year in May, dropping to -18 from -16 in April, with consumers
increasingly gloomy about the future of the economy and turning negative
on the outlook for their personal finances, according to the latest
GfK/NOP survey.

There was a slight improvement in consumers’ perceptions of the
economic, and personal financial, situations over the past 12 months but
there was rising pessimism over the outlook for the next 12 months.

The headline -18 outturn was the lowest since the -19 outturn in
December last year.

The measure for consumers’ personal financial situations over the
past 12 months rose to -13 in May from -15 in April, while the
expectation for the personal financial situations over the next 12
months turned negative, falling to -3 from 2 in April.

Similarly, consumers were more upbeat about the economic situation
over the past 12 months, with this balance rising to -45 from -47 in
April. The forward looking reading for the economic situation plunged to
-9 from -1.

The survey’s findings also suggest there will be soft demand for
big ticket items over the next 12 months. The question on whether now is
a good time to make a major purchase returned a negative net balance of
21, down from a negative net balance of 20 in April.

Consumers are, instead, more inclined to save. The “now is a good
time to save” Index, rose from -7 to -5, which is eleven points up on a
year ago.

The survey was conducted between April 30 and May 16, a time span
which pre- and post-dated the May 6 UK election.

“These figures are clearly not good news for the coalition
government, especially with mounting speculation about double dip
recession. With considerable cuts in public spending, plus higher taxes
on the way, it is hard to see the confidence index improving
significantly in the near future,” Nick Moon, managing director of GfK
NOP Social Research, said.

“Most worryingly, the biggest drops in the component parts of the
index were in expectations for the next 12 months for the country as a
whole and for consumers themselves,” he added.

2010 2010 2010
May Apr Mar
Headline Index Score -18 -16 -15
Personal financial situation past 12 months: -13 -14 -15
Personal financial situation next 12 months: -3 2 4
General econ. situation over last 12 months -45 -47 -49
General econ. situation over next 12 months: -9 -1 0
Climate for major purchases: -21 -20 -17

–London newsroom 44207 862 7491; email: drobinson@marketnews.com

[TOPICS: MT$$$$,M$B$$$,MABDS$]