The odds of the UK falling into a recession shortened yesterday as household confidence levels plunged to the lowest level on record.
A monthly consumer confidence survey by market research firm GfK dropped by one point to -41 in June, as households reported a worsening personal financial situation and a fall in the level of savings. Only one measure of the survey, purchasing intentions, stayed flat.
UK households will suffer the biggest annual drop in disposable income since the 1950s this year, according to the government’s independent economics watchdog. Consumers face double-digit inflation, a rising tax burden and wages that fail to keep up with prices.
Sharp drops in household consumption will lead to almost no growth in the UK economy for the next three years, according to forecasts from the Bank of England.
Retailers reported a year-on-year fall in sales in June and expect sales next month to be well below normal for the time of year as shoppers’ disposable income is eroded, a CBI survey showed yesterday.
