December saw UK consumer morale hit its lowest in almost three years, according to a recent survey from researchers GfK NOP.
The researchers found that British households had become more pessimistic about their prospects in the coming year, showing a drop in the consumer confidence index from November’s -33 to -31.
“Optimism has not been lifted by pre-Christmas spending,” said Nick Moon, managing director of GfK NOP Social Research.
Moon went further to say that the squeezed state of household budgets makes it hard to imagine a “recovery in confidence” in the near future.
The report on consumer morale said that the dip in the confidence index was mainly spurred on by an increasingly downbeat view of the coming year.
The optimism component of the survey fell 8 points from November, down to -41 in its lowing showing since January 2009.
Everywhere headlines are reading of eurozone fears, weak economic growth, and cut growth forecasts. A recent good showing in the retail sector pushed showed a rare glimmer of hope for the economy, but economists are still predicting contraction for the end of 2011 and the beginning of 2012.
Wherever they turn, consumers are faced with the bad news: economic hard times are coming, and there’s no predicted respite for those who are already hard-hit.
The survey was conducted between 2 and 11 December, in the immediate wake of Chancellor George Osborne’s autumn budget statement on 29 November.
This could have had a dramatic impression on the outlook and morale of consumers, as the autumn statement revealed a heavy downgrade to growth forecasts from 2012.
UK citizens were also informed that the government would continue stalwartly pressing on with further economic austerity measures, though millions of families have already been worse off after reforms to the Child Benefit and other social programmes.
The government’s spending cuts, which are attempts to tackle the deficit, have left families with falling wages and rising unemployment. This, in turn, has weakened consumer activity in the past 2 years, a major factor behind Britain’s disappointing economy in 2011.
There looks to be no respite from austerity or a floundering economy in the coming months, as consumers and economists alike predict the same gloomy forecast for the future.