Bloomberg News

Britons in ‘Constant Depression’ as Outlook Darkens, GfK Says

June 28, 2012

U.K. consumer confidence failed to improve in June as a darkening economic outlook kept household sentiment in its worst slump in almost four decades, GfK NOP Ltd. said.

An index of confidence held at minus 29, the London-based research group said in an e-mailed report today. That matched the median estimate of 20 economists in a Bloomberg News survey. A measure of Britons’ outlook for the economy over the next 12 months fell five points to minus 31.

“The stagnant level of consumer confidence suggests that the public is stuck in a period of constant depression, which it is finding very hard to snap out of,” said Nick Moon, GfK Social Research managing director. The index has been “at minus 29 or worse for an entire 12-month spell –- the worst run in its 40-year history.”

The continued weakness in confidence may limit growth in consumer spending this year after data yesterday showed household expenditure fell 0.1 percent in the first quarter and real disposable income declined. Chancellor of the Exchequer George Osborne announced this week he will scrap an increase in fuel duty that was due to take effect in August to help people through a “very difficult economic time.”

Moon said there was no “royal bounce” for confidence from the public holiday and celebrations to mark Queen Elizabeth II’s jubilee, as there was from the wedding of Prince William and Kate Middleton in 2011.

‘Dispiriting’

A gauge of Britons’ outlook for their personal financial situation over the next year remained unchanged in June at minus 9, GfK said. An index of whether now is a good time to make major purchases climbed four points to minus 28.

“While the current position is better than it was at the depths of the financial crisis in 2008, the figures do mark a dispiriting new type of low,” Moon said of the consumer- sentiment gauge. GfK surveyed 2,003 people from June 8 to June 17 for the index, which has been running since 1974.

Disposable income dropped 0.9 percent in the first quarter from the previous three months, when it also declined by that amount, the Office for National Statistics said yesterday in London. Gross domestic product fell 0.3 percent, matching a previous estimate, after dropping a revised 0.4 percent in the last quarter of 2011.

-- Editors: Fergal O’Brien, Andrew Atkinson

To contact the reporter on this story: Svenja O’Donnell in London at sodonnell@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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