LONDON: British consumer confidence suffered its steepest drop in nearly three years last quarter as concerns over job security and persistent inflation weighed on sentiment, according to a Deloitte survey released on Monday.
The consumer confidence index fell by 2.6 percentage points to 10.4% in Q2 2024, the lowest level since early 2024.
This marks the first significant decline since Q3 2022, when inflation surged to double digits and financial markets reacted negatively to former Prime Minister Liz Truss’s budget plans.
Deloitte noted that a minor 0.2-point dip last year was not statistically significant.
“Consumers are increasingly worried about job security and income growth due to signs of a slowing labour market,“ said Celine Fenech, Deloitte’s consumer insight lead.
“High living costs and inflation have also hurt sentiment around personal debt.”
Businesses attribute hiring hesitancy to rising employment taxes, an increased minimum wage since April, and stricter dismissal laws for new employees.
Recent official data showed unemployment climbing to 4.7% in May, the highest since 2021, while inflation rose to 3.6% in June.
Deloitte’s findings contrast with GfK’s long-running consumer sentiment survey, which improved last month to its highest since December.
Deloitte’s survey, conducted among 3,200 consumers between June 13 and 16, measures sentiment across job security, income, debt, and general wellbeing.
Despite a 3.9-point rise in economic outlook, the balance remains 18.4 points lower than a year ago.
“The UK economy has slowed, but business confidence remains resilient amid global uncertainties,“ said Deloitte chief economist Ian Stewart. - Reuters
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