Britons' outlook for the economy sank to a near all-time low in April and is close to when banks were on the brink of collapse during the 2008 financial crisis, according to a study.
A perfect storm of rocketing energy prices, higher taxes and high inflation caused the consumer confidence index to drop by seven points to -38 in April, its lowest level since 2008 when it was minus 39, according to market research firm GfK. A year ago the figure was -15.
The UK consumer confidence index is a measure of how people view the state of their personal finances and wider economic prospects. GfK also reported a sharp decrease in consumers' intentions to make major purchases.
The data leaves the Bank of England in a complicated position as it decides whether to hike interest rates for a fourth consecutive time.
Joe Staton, the client strategy director at GfK, said: “The cost crunch is really hitting the pockets of UK consumers and the headline confidence score has dropped to a near historic low.
“The scores looking at the next 12 months for our personal finances at -26 and the general economy at -55 are worse than the 2008 financial crash. The personal finance score for the next year is also worse than the initial COVID shock in 2020.
“When rising inflation and interest rates meet low growth and declining incomes, consumers will understandably be extremely cautious about any spending. There’s clear evidence that Brits are thinking twice about shopping, as seen in the tumbling major purchase index – now is not considered to be a good time to buy. This is dire news for consumer confidence and with little prospect of any economic relief on the horizon we can only forecast further falls in the index for the year ahead.”
UK inflation rose to 7% in March, reaching a 30-year high.