Consumer confidence tumbles to lowest level since 1970s

Consumer sentiment reached -44, dropping three points compared to July and reaching the lowest point since records began in 1974.

Confidence in personal finances over the previous year fell two points to -25, which was 25 points lower than the same month in 2021.

The outlook for personal finances for the upcoming year fell five points to -31 – a 42-point drop from August last year – as consumers brace for rising inflation and energy bills.

The measure for the general economic situation over the previous 12 months declined two points to -68.

Sentiment towards the general economic situation in the next 12 months deteriorated by three points to -60, which was 54 points less than August 2021.

The major purchase index was also battered, falling four points to -35 as consumers tighten their belts on big-ticket spending.

The savings index is the only measure which grew, up five points to 18 with consumers counting their pennies. This is still seven points lower than the same time last year.

GfK client strategy director Joe Staton said: “A sense of exasperation about the UK’s economy is the biggest driver of these findings. Our sub-measure on the general economy over the past year has decreased month on month since December 2021 – that’s eight months in a row.

“A similar consistent sharp decline since December 2021 is evident in how consumers see the economy a year ahead and this month’s score of -60 sets a new record.

“These findings point to a sense of capitulation, of financial events moving far beyond the control of ordinary people. With headline after headline revealing record inflation eroding household buying power, the strain on the personal finances of many in the UK is alarming. Just making ends meet has become a nightmare and the crisis of confidence will only worsen with the darkening days of autumn and the colder months of winter.”