–GfK/NOP: UK July Consumer Confidence -22 Versus -19 in June

LONDON (MNI) – UK consumer confidence dropped to its lowest level
for almost a year in July, with the Gfk/NOP’s index falling to -22 from
-19 in June, with the company suggesting confidence may already have
been hit by concerns over government spending cuts.

The headline -22 reading was the weakest since the -25 seen last
August and way below the series’ long run average of -8. The survey
found optimism also fell in the personal financial situations index for
the next 12 months, with this index turning negative after last month’s
weakly positive outturn.

The personal financial situations index for the next 12 months fell
to -6 from June’s -2, putting it six points down on a year ago and at
its lowest level since March 2009, when it was also -6.

The measure for consumers’ personal financial situations over the
last 12 months was unchanged on the month at -14.

The Gfk/NOP survey found there was little change in consumers’
perceptions of the general economic situation over past 12 months, at
-48 in July compared to -46 in June.

Similarly to their increased pessimism over personal finances,
consumers were more downbeat about the economic situation over the next
12 months, with this balance falling to -25 from -12 in May, again the
lowest since March 2009, when it was -31.

The demand for big-ticket items index clawed its way back to -16
after crashing to a six-month low of -24 in May.

Consumers appear more inclined to save. The “now is a good time to
save” index, rose to -2 from -4, which is up ten points from a year ago.

“Given that consumer confidence measures are normally good
predictors of what the economy itself will do a few months later, the
continuing slide in the Index makes a double dip recession look more of
a possibility as each month goes by,” Nick Moon, managing director of
Gfk NOP Social Research, said.

“Concerns about the fragility of the recovery and the potential for
a double-dip recession may be exacerbated by the fall in confidence in
the general economy,” Moon said.

“It’s possible that respondents are already factoring into their
view of the economy over the next 12 months the likely recessionary
impact of the government’s announcement about the level of spending cuts
it wishes to make, but if they are not then the prognosis is even more
gloomy.”

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

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