Consumer confidence drops amid personal finance concerns

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Consumer Confidence
// Consumer confidence dropped by 3 points in June, amid concerns in personal finances
// The GfK Consumer Confidence Index said consumer confidence fell to -13, down 4 points Y-o-Y
// Shoppers’ confidence in their personal finances in the last year declined by 3 points to 2

Consumer confidence has dropped by three points in June, thanks to concern in personal finances according to the long-running GfK Consumer Confidence Index.

In the UK, overall consumer confidence fell three points to -13 compared to May, but year-on-year it was a four-point drop.

Shoppers’ confidence in their personal finances in the last year has declined by three points to 2 on the index.

Meanwhile, confidence in the general economy in the previous year fell two points to -32, while confidence for the year ahead declined four points to -33.

The major purchase index declined by three points to -2, although the savings index rose three points to 19.

“With all measures falling across the board this month, we revert to the Overall Index Score of -13 that we saw four times already this year,” GfK client strategy director Joe Staton said.

“While UK consumers continue to remain concerned about the wider economy, over which the woman or man in the street has no control, of greater worry are the falls in the measures for personal finance.

“These better reflect our hopes and fears for our everyday financial futures and this, coupled with a decline in the major purchase index, could point to a turbulent time for the economy over the summer months.

“Another trend to watch, even though it’s not included in the overall index Score, is the savings index – up for the third month in a row at 19.

“Despite more of us agreeing that ‘now is a good time to save’, the official savings ratio (the percentage of disposable income being saved) stands at near historic lows as households must either dip into their savings or go into debt to fund the cost of day-to-day living.

“This is important because, without the security of a savings buffer, consumers may well be unable to absorb the impact of any downturn a no-deal Brexit might deliver.”

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