By Ian McConnell
Business Editor
UK consumer confidence has remained stuck at a record low this month, with pollster GfK describing the cost-of-living crisis as a “red-hot issue” for households.
GfK’s consumer confidence index remains at -41, unchanged from June and the joint-lowest since comparable records began in 1974.
Joe Staton, client strategy director at GfK, said: “Consumer confidence remains severely depressed this month as the impact of soaring food and fuel prices and rising interest rates continues to darken the financial mood of the nation. The overall index languishes at a historic low amid acute concerns for the general economic situation.”
He added: “Against this financial backdrop, the UK electorate is looking for a new leadership with a commitment to unleashing growth, tackling inflation and cutting taxation. The successful candidate will need to deliver a much-needed shot in the economic arm of the country if they are to help improve consumer confidence.”
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Annual UK consumer prices index inflation has surged to 9.4 per cent – more than four-and-a-half times the 2% target set for the Bank of England by the Treasury.
Bank Monetary Policy Committee member Michael Saunders, who voted unsuccessfully for a half-point rise when the nine-strong MPC voted to increase UK base rates by a quarter-point to 1.25% last month, said on Monday: “I note that the BoE (Bank of England) market participants’ survey and the Treasury’s survey of external forecasters both suggest that Bank Rate will rise to around 2% in the next year.
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“Market pricing is even higher. Neither the external consensus nor the path of inflation break-evens implies that such a rate path will leave inflation below target over time. Without wishing to endorse those views too strongly, I do not regard such an outcome – i.e. that Bank Rate will have to rise to 2% or higher during the next year to return inflation to target – as implausible or unlikely.”
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