Consumer confidence has dropped to its lowest level in 22 months, according to research by GfK NOP Social Research.
This drop over the course of January to -29 has only been equaled six times before in the 35 year history of the Consumer Confidence Index.
Nick Moon, the managing director of GfK NOP Social Research, says the recent hike in VAT to 20% had a widespread impact on consumers and with the government’s austerity measures yet to be fully felt, there is an increasing possibility of a double-dip recession.
Of the five measures used to record the results, the most notable decrease came from the ‘major purchases’ index which dropped 22 points to -29 – a total of 13 points lower than in January 2010. (article continues below)
Expectations regarding the general economic situation over the next 12 months have dropped by 7 points to -30.
The personal finances situation is four points lower than this time last year at -18 and the forecast for the next 12 months is 16 points lower than it was in January 2010, reaching -12.
Consumers have also registered concerns about the savings environment as the ‘now is a good time to save’ index’ has dropped by 5 points to -5.