Consumer confidence declines and savings rise

Posted on June 1st, 2011 | Categories - News

UK consumer confidence has fallen.

Fewer Brits feel secure in their jobs.

More people are saving their cash for a rainy day as consumers become increasingly pessimistic over the state of the economy.

Research published by the British Retail Consortium (BRC) shows that a third of people are depositing their spare cash into savings due to the fear of job losses and rising living costs. The sharp fall in consumer confidence highlights the discontent and anxiety felt amongst a growing UK population.

Despite a rise in savings levels, 70% of people polled in the GB Consumer Confidence index said they do not have any spare cash to set aside in the first place. Over a fifth of participants said rising fuel prices are their first or second concern and 85% of respondents said they still believe the UK is tangled in recession.

Stephen Robertson, director of the BRC, said: “Nearly a third of people now say they have no spare money because households are suffering a squeeze between high inflation and low wage growth. In real terms, disposable incomes have fallen for the first time in 30 years”.

He continued:“With inflation expected to rise further and average earnings showing only minimal growth, disposable incomes will be under continuing pressure for the rest of the year and beyond. The prospect of interest rates beginning to rise as the housing market weakens can only dent consumer confidence further over the coming months”.

The GB index is a small segment in the larger Nielsen Global Consumer Confidence Survey, which covers over 50 world countries. Overall it showed that the UK consumer outlook fell sharply against a global backdrop of growing optimism with 18 of the participating countries recording a rise in confidence.