–GfK/NOP: UK Jan Consumer Confidence -29 Versus -21 Dec
–GfK/NOP: UK Jan Consumer Confidence Lowest Since March 2009
–GfK/NOP: Major Purchases Index Plunges 22 Points To -29

LONDON (MNI) – UK consumer confidence dropped in January, hitting
its lowest level since March 2009 and recording its largest monthly fall
since December 1994, according to the latest GfK NOP Consumer Confidence
Index.

The headline January consumer confidence index came in at -29, the
lowest reading since the -30 seen in March 2009 and way below the
series’ long run average of -8. The reading follows the news UK output
contracted in the fourth quarter, with the survey conducted after the
new year value added tax cut hike kicked in.

The impact of the January VAT hike was visible, with the measure
showing consumers’ appetite for major purchases showing the fastest
monthly fall of the sub-indices.

The sub-indices all showed falls. The index for consumers’ personal
financial situation over the past 12 months dropped in January to -18
from December’s -16 and consumers’ pessimism over the outlook for their
finances over the next 12 months rose, with this index dropping to -12
from -8.

Consumers were gloomy about the UK’s economic outlook. The
expectation measure for the general economic situation over the next 12
months fell to -30 from -23, 28 points down on a year ago.

The measure of the general economic situation over the past 12
months fell to -54 from -51.

“January’s eight point drop represents an astonishing collapse in
consumer confidence,” Nick Moon, MD of GfK NOP Social Research, said.

Looking at GfK’s data, the last time a monthly fall exceeded eight
points was back in December 1994, when the index dropped 10 points to
-18.

“The VAT increase is the first of the government’s austerity
measures that has had a widespread impact on consumers, and it seems to
have hit people’s economic confidence hard, especially as the biggest
drop was in consumers’ appetite for major purchases,” Moon said.

The major purchases measure plunged by 22 points in January to -29.

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

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