Consumer confidence declined by two points this month to -30, its lowest level in six months, according to data released today.
Such a drop in the GfK/NOP Consumer Confidence Index leaves the measure‘s average balance since the beginning of this year at a worse level than over the initial 10 months of recession in 2009, warned experts.
A lack of public confidence in personal finances is driving the decrease with the index measuring changes to personal funds during the last 12 months falling three points in October to -24, remaining at the same level as in October 2011.
Looking ahead, the forecast for personal finances in the coming 12 months decreased five points to -13, a three point drop on the same period last year and the biggest monthly decline since June 2011.
Nick Moon, Managing Director of Social Research at GfK, said of the figures: “The fragility of the recovery is underlined by the fact that people are more worried about their own financial situation over the next 12 months.
“This certainly doesn‘t suggest there will be a spending boom on the back of the official emergence from recession.”
Last week, it was revealed that the UK economy has returned to growth after a considerable slowdown, allaying fears of a prolonged double-dip recession.
GDP rose one per cent in the three months from July to September compared to Q2 buoyed by Olympic ticket sales, though the Office for National Statistics warned that retailers saw little improvement during the period.
Also reporting a drop this month was the climate for major purchases index, which dropped two points to -33, one point lower than this time last year as consumers put off large spending with Christmas looming.
Martin Beck, UK Economist at Capital Economics, warned that the surveys were undertaken prior to news about the improvement in GDP and hopes that the positive reception will boost sentiment.
However, he warned: “But, on the face of it, confidence levels remain a long way from being consistent with strong retail sales growth.
“With hefty rises in utility prices in the pipeline and continued pressures on real earnings, we think that the economy‘s emergence from recession by no means heralds a revival of consumer spending.”