UK consumer confidence reaches lowest level ever in May

Consumer confidence in the UK dipped even further in May, according to a long-running survey released on Friday, making for the lowest overall confidence score since records began.

The GfK consumer confidence index decreased two points to -40 in May - the lowest score since the survey started in 1974.

Four of the index’s five measures were down from April, although one - personal finance situation over the next 12 months - was up.

“The consumer confidence barometer recorded a headline score of -40 in May, the worst since our records began in 1974,” said Joe Staton, client strategy director at GfK.

“This comes as UK unemployment hits a 50-year low with vacancies outnumbering job seekers for the first time, and inflation peaking at a 40-year high driven by soaring food and fuel bills.”

Staton pointed out that May’s result was one point lower than the previous record set in July 2008, when the headline score plunged to -39.

“This means consumer confidence is now weaker than in the darkest days of the global banking crisis, the impact of Brexit on the economy, or the Covid shutdown.”

Looking at the survey’s sub-measures, the index measuring changes in personal finances over the last 12 months decreased three points to -22 - 18 points worse than May 2021.

The forecast for personal finances over the next 12 months, however, increased one point to -25, although that was still 35 points lower than the same time last year.

GfK said the measure for the general economic situation of the country during the last 12 months was down three points at -63, 15 points lower than in May last year, while expectations for the general situation over the coming year dropped by one point to -56, which was 60 points lower year-on-year.

The major purchase index decreased three points to -35 in May, 28 points lower than May 2021, while finally, the savings index was the same as last month at +10, which was still 12 points lower than this time last year.

“Consumer pessimism is most evident in depressed sub-measures on the general economy at -63 for the past year and -56 for the coming year,” Joe Staton added.

“The major purchase index has decreased for each of the past six months and is now at -35, reflecting the latest dismal set of retail sales figures.”

Even the Bank of England was pessimistic, Staton quipped, with governor Andrew Bailey “offering no hope” of tackling inflation.

“The outlook for consumer confidence is gloomy, and nothing on the economic horizon shows a reason for optimism any time soon.”