Consumer confidence slumps in wake of hung parliament, according to survey
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June data shows pronounced collapse in consumer confidence
following the election – falling from 109.1 in week before the vote
to 105.2 in period after it Overall consumer Confidence Index
for the month drops to 106.9 – only slightly higher than immediate
aftermath of EU vote Consumer confidence driven down by weakened
household finances and cooling property prices But optimism about
business activity and job security remains...Request free trial
UK consumer confidence slumped sharply after the indecisive result of the general election, falling to levels comparable to the immediate aftermath of last year’s vote to leave the EU, the latest data from YouGov and the Centre for Economics and Business Research shows. The analysis shows that in the first eight days of June – before the results were known – the YouGov/Cebr Consumer Confidence Index stood at 109.1, around the same level it was at before the snap election was declared. However, in the twelve days after the votes were counted, the Index fell to 105.2. This is similar to what was measured in the period around last June’s referendum on EU membership when consumer confidence fell from 111.9 in the weeks before the vote to 104.3 in the days after it. YouGov is able to look at how specific events shape consumer confidence as it collects data every day, conducting over 6,000 interviews a month. Respondents are asked about household finances, property prices, job security and business activity, both over the past 30 days and looking ahead to the next 12 months. Looking at the figures for June as a whole – combining both pre and post-election data – the Consumer Confidence Index for the month overall is at 106.9, its second-lowest level since the summer of 2013. The only time it was worse was just after last year’s Brexit vote. The decline in consumer confidence is driven by two specific factors. The first is a sharp decline in optimism over property prices. In the past four years, both the backward and forward house value metrics have only been lower on one occasion – straight after the EU referendum. The second is the continuing slow puncture of people’s household financial situations. Both the forward and backward-looking measures fell in June with household finances over the past month being at its lowest level since December 2014 and the metric for the year ahead being lower than at any point since December 2013. However, the data suggests that the job security and business activity measures, both for the last 30 days and the next 12 months, are proving relatively resilient. Stephen Harmston, Head of YouGov Reports: “Consumer confidence has been generally ticking downward since last autumn but the events of the past month have placed it under greater pressure. The hung parliament seems to have further dampened consumers’ spirits, which were already sinking following the continued squeeze on household finances. But the real cause for alarm will be the cooling of the property market, as this is one of the key things that has propped up consumer confidence over the past few years.” Douglas McWilliams, Deputy Chairman at the Centre for Economics and Business Research: “It looks as though the indecisive result of the election has seriously affected economic prospects already dampened by Brexit uncertainty. The data shows a sharp drop in consumers’ confidence about their own financial situation and even more so about house prices. This will affect spending in the high street, in shopping centres and online. Meanwhile business confidence is also likely to have dropped. Our preliminary assessment is that economic growth will fall sharply over the coming months and the country will only be saved from recession by strong international trade. We will be releasing our updated forecasts next week and they will show a significant downward revision.” – ENDS – About the YouGov/Cebr Consumer Confidence Index:
The YouGov/Cebr Consumer Confidence Index is based on eight measures:
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