By Max Clarke
Consumer confidence in the UK remains subdued, dipping still further on the Nationwide Consumer Confidence Index during June.
Again, muted wage growth, rising utilities prices, and high inflation are adding to the squeeze on families’ disposable incomes, resulting in reduced spend on the high street.
Retailers have responded by offering deals and lowering prices, which may be starting to claw back business lost, as Mark Saddleton, Nationwide Head Market Economist explains.
“There are signs that the weakness of consumer spending power is beginning to exert downward pressure on prices in the High Street, and better than expected inflation figures for June give hope that there may be some respite for consumers ahead. Nonetheless, with food, energy and commodity prices still rising, it will be difficult for inflation to continue on this downward trend and it may still be some time before it returns to the Bank of England’s 2% target.”
Consumers also predict that financially, the worst is still to come. With no perceived end to UK householders’ financial worries, they are less inclined to spend, further exacerbating the high street’s woes.
“It continues to be consumers’ expectations towards the future situation which is primarily influencing the direction of the Index month‐on‐month. In June, a seven point fall in the Expectations Index had a dampening effect on the overall measure of confidence. This fall was mainly attributable to changes in perceptions of the general economic outlook rather than the future employment situation.”
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