Consumer confidence worsened for the fifth consecutive month in July, fuelling fears of a return to recession.
GfK NOP’s Consumer Confidence Index, compiled for the European Commission, fell three points month on month to -22.
Consumers were less confident about their personal financial situation and the general economic situation over the next 12 months. However, attitudes towards making major purchases improved.
GfK NOP social research managing director Nick Moon said: “Given that consumer confidence measures are normally good predictors of what the economy itself will do a few months later, the continuing slide in the index makes a double dip recession look more of a possibility as each month goes by.
“It’s possible that respondents are already factoring into their view of the economy over the next 12 months the likely recessionary impact of the Government’s announcement about the level of spending cuts it wishes to make, but if they are not then the prognosis is even more gloomy.”
He said that the improvement in attitudes towards big-ticket purchases may reflect a willingness to buy before VAT goes up in January.