UK Financial Recovery Hopes Dwindle

Consumer confidence for an economic recovery is at its lowest point for over a year with expectations unlikely to improve, according to a leading market research agency on Wednesday.

A study by GfK NOP, published this week said the measure for the general economic situation of the country during the last twelve months has stayed the same this month at its lowest point of -57, fourteen points lower than this time last year.

Meanwhile. The study also found that expectations for the next twelve months had decreased by four points to -31, seventeen points lower than August 2010.

Nick Moon, Managing Director of GfK NOP Social Research, said: "The index has fallen for the third month in a row and consumer confidence is down to -31, where it was in April this year.

"Previously, it had only been as low on two other occasions: during the downturn of 2008 and 2009 and in the turbulent early months of 1990. On both occasions, the decline in consumer confidence mirrored a slide into recession."

Mr Moon said that an increasing number of indicators suggested the economy is either stagnating or returning to recession, while the continuing loss of consumer confidence is a major worry for the government.

"However, while there has been a 4-point drop in consumers' general view of the economic situation over the next 12 months, there has been a small improvement in how they view their own financial situations, suggesting that people are adapting to the austere economic climate."

The UK Consumer Confidence Survey from GfK NOP was conducted amongst a sample of 2,000 individuals aged 16 and over on behalf of the European Commission.

The combination of a employment market stuttering, little wage growth, high inflation, tough fiscal policy, and turmoil in global financial markets, has kept consumer confidence low for much of 2011.

(DW/GK)