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UK consumer confidence deteriorated in December, data published by S&P Global showed Monday.
The UK S&P Global consumer sentiment index fell to 46.6 in December from 46.9 in November. Falling further from the neutral 50-points mark separating growth from contraction, it indicates the pace of decline accelerated.
‘The high cost of living has led to a continued erosion of disposable income, as households are experiencing a more pronounced decline in available cash for spending and are increasingly relying on their savings to meet their expenses. Households have indicated a greater need for borrowing to sustain their standard of living, with December seeing a further and more significant accumulation of debt, which will only add to the financial pressures faced by households,’ said Maryam Baluch, economist at S&P Global Market Intelligence.
The spending sentiment index contracted to 39.7 in December from 40.4 in November.
Perhaps more positively, the labour market sentiment index rose to a 5-month high of 54.4 in December from 53.9 in November.
‘High level of employment are being accompanied by rising income from employment, which increased at the strongest rate in the series’ history, which spans over 15 years, though this in part reflects households having to work harder to maintain their standards of living without recourse to debt or savings,’ said S&P’s Baluch.
The debt sentiment index edged down to 49.4 in December from 49.5 in November, while the savings index fell to 44.2 in December from 44.6 in November.
‘UK households experienced ongoing pressures on their current finances in December. At the same time, perceptions of financial wellbeing for the upcoming year reflected heightened pessimism. In both instances, the relevant indexes declined to three-month lows, thereby solidifying a turnaround of the gains seen following the election in July,’ S&P Global said.
On Sunday, PA reported that business confidence among Britain’s manufacturers has fallen at the sharpest rate since the start of the pandemic, citing new research.
A survey of over 300 companies found that escalating costs have affected their outlook on the economy.
Almost three quarters of manufacturers said costs increased by up to a fifth in the last year, while around one in 12 had seen their costs increase by up to a half.
Make UK said the survey showed almost nine in 10 companies will see their business costs increase due to the new employment reform, while the budget is expected to add substantial extra business costs to the sector.
The consumer sentiment survey is based on monthly responses from approximately 1,500 individuals in the UK, with data collected by Ipsos MORI from its panel of respondents aged 18-64. The responses were collected between December 5 and 9.
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