UK consumer confidence fell to its lowest level since the global financial crisis in May as people worried about a rise in unemployment and falling house prices caused by the coronavirus crisis.
Polling firm Gfk said its consumer confidence index slipped its lowest since January 2009 and not far off the lows touched in July 2008.
“With no sign of a rapid V-shaped bounce-back on the cards, consumers remain pessimistic about the state of their finances and the wider economic picture for the year to come,” GfK’s client strategy director Joe Staton said.
The one positive note from the survey came from a six-point rise in a measure of how willing consumers are to buy expensive items.
He added: “As the lockdown eases, it will be interesting to see just how the consumer appetite for spending returns in a world of socially-distanced shopping and the seismic shift to online retailing.”
Earlier this week data showed the UK’s services sector had suffered a severe downturn in May.
The services sector – which includes the pub and restaurant industries – has been battling the economic consequences of the coronavirus pandemic and lockdown.
As a result the closely watched UK services PMI survey came in at 29 for May, firmly in contraction territory.
A PMI reading below 50 represents a contracting market, with anything over 50 indicating a growing market economy.
A major issue has been the severe lack of new business to replace work that had been completed after the lockdown, following deep cutbacks to corporate spending in response to COVID-19.