Almost half of Britons think the UK economy is in recession, a new poll has found.
Some 45 per cent of British people think output is in decline, according to a survey published today by pollsters Nielsen.
The stark finding highlights the fall in consumer confidence in recent months as price rises have started to outstrip wages.
While the UK economy continued to expand in the first half of the year, GDP per head, remained stagnant. Meanwhile, prices rose by an annual rate of 2.6 per cent in the year to June, far outstripping the 2.1 per cent growth in wages over the same period.
Nielsen’s measure of consumer confidence shows the UK slipping down the rankings compared to European counterparts over the course of the last year.
British consumers are now the ninth most confident in Europe, down from second at the end of 2016, when Nielsen’s index came in at 106. It has now reached 99, below the 100 score which indicates overall optimism.
That tallies with a widely followed measure of consumer confidence compiled by GfK, which showed consumer confidence had fallen back to the post-Brexit-vote low hit in the immediate aftermath of the referendum as real incomes had been hit.
The fall in real incomes has led consumers to change their spending habits at the fastest pace in two years as they tighten their belts in the face of rising prices, the poll shows.
More than half of UK consumers said they have tried to cut their household costs.
The change in shopping behaviour is “reminiscent of the aftermath of the financial crisis”, according to Steve Smith, managing director of Nielsen UK and Ireland.
“Shoppers are well trained to use their household grocery budgets as a way to manage overall household costs, particularly as the desire to treat themselves remains,” he said. “This is shown by the fact relatively fewer people are willing to sacrifice entertainment, holidays, and takeaway meals.”