August 2022: UK Consumer Confidence Briefing

GfK data shows consumer confidence down to a new 48-year record low

The monthly UK Consumer Confidence Barometer (CCB), undertaken by GfK is down 3 points to a new 48-year record low of -44, 36 points below August 2021 (-8).

Confidence fell in 5 of the 6 major UK regions. The biggest fall is in Scotland, down 10 points to -52 and in Northern Ireland, 8 points lower, also at -52. In Wales confidence dropped 5 points to -54, with sentiment 4 points lower at -40 in the South and 2 points lower in the North (-49). Only in the Midlands is sentiment higher on the month, up 1 point at -41.

Of the 5 sub-measures comprising the headline measure:

  • The financial situation of households over the past 12 months is down 2 points at -25 on the month, and down 25 points on a year ago (0).
  • The expected financial situation of households over the next 12 months is 5 points lower on the month at -31; 42 points down on 12 months ago (+11).
  • The general economic situation score over the past 12 months is 2 points lower on the month at -68, and 26 points below 12 months ago (–42).
  • For the coming 12 months the general economic situation measure is down 3 points at -60, 54 points below July 2021 (-6).
  • The measure of consumer sentiment to making major purchases in view of the current economic situation is 4 points down on July at -38 and down 35 points on 12 months ago (-3).

The survey also asks other questions about spending and saving. Expected spending on major purchases (such as furniture or electrical goods) in the next 12 months compared with the previous 12 months dropped 5 points to -34 in August, 31 points down vs August 2021 (-3). Overall spending confidence on major purchases of household goods shed 9 points on the month to –72 and is 66 points down on 12 months ago (-6).

Saving confidence improved in August. 53% of consumers are likely to save in the next 12 months, up from 52% in July, but down from 63% in August 2021. 53% of adults believe it to be a good time to save (52%, July, 58% August 2021). Compared to July (+22) saving confidence is 6 points higher (+28) but 25 points down vs August 2021 (+53). Currently 50% of households are saving, unchanged vs July, but well below 58% a year ago. Households overall financial position (+19) is 3-points better vs July and at a 6-month high, but 11 points below August 2021 (+30) and 2 points below the long-term average of +21.

The jobs outlook measure worsened by 2 points on the month to +33 vs July and worsened by 9 points vs August 2021 (+24). A higher score represents rising unemployment expectations. A net balance of 40% of adults (39%, July and 28% a year ago) believes unemployment will rise in the next 12 months. The measure of inflation expectations grew vs July, rising 4 points to +113, while the measure of inflation over the past 12 months (+115) is unchanged on the month. August’s Inflation Index combining current and future measures is +228, a 4-point worsening vs July.

The JGFR Financial Wellbeing Index slumped in August dropping 19 points vs July to -123, a record low, and is 190 points below 12 months ago (+67), while the JGFR Feel-Good Index also tumbled in August, shedding 13 points to -118, also a record low and down 127 points on a year ago.

John Gilbert, Director, JGFR commented:

Judged by the mood of the country, the new Prime Minister’s first job will be to introduce policies that will win back consumer (and business) confidence. This month’s record sentiment low at the height of the summer holidays, with much gloom forecast ahead as the cost-of-living crisis intensifies, puts millions of low-paying jobs at risk. Many of these may be in small businesses where energy costs are forcing closures while the cost /ability of getting to work may not be worth the effort for other workers.”

John Gilbert

John Gilbert runs JGFR Research and has built up over many years a store of data tracking the mood and financial activity of UK consumers and written many research reports. John has a background in economics, banking and financial services in the City . His interests cover business, sport, charities, philanthropy, politics and higher education. John is a Fellow of the Marketing Society, a member of the Society of Professional Economists and is a supporter of the Archive of Market and Social Research.

All articles