Consumer confidence has been “battered and bruised” by the coronavirus crisis, new research has found as optimism remained low despite the easing of lockdown restrictions.
The latest data showed that confidence was at minus 34 as consumers were concerned about the economic impact of the pandemic, with unemployment claims rising amid warnings of a recession.
The government this month set out a plan to ease lockdown restrictions, including allowing non-essential retailers to reopen from 1 June at the earliest, with hospitality businesses to remain closed until at least 4 July.
However, the plans for lifting the lockdown, which also prompted the housing market to reopen, did not boost GfK’s consumer confidence index.
Confidence in the general economic situation over the last 12 months plummeted seven points over the last two weeks to minus 55. There was a one per cent dip in confidence over the next 12 months, which fell to minus 54.
Optimism over personal financial situations over the last 12 months was flat at minus four points, while confidence for the next 12 months increased two points.
The major purchase index increased two points to minus 47.
GfK client strategy director Joe Staton said consumer confidence remained “battered and bruised” despite the announcements earlier this month.
“With unemployment claims rising by the highest rate on record and warnings of a severe recession and possible tax hikes, the damage done by the coronavirus pandemic to the UK economic landscape has been laid bare,” Staton said.
“The lower scores we have registered on the general economic situation reflect this and the government is dampening down expectations of an immediate economic bounce back.
“So despite plans to get the country up and running, consumers feel we are not out of the woods yet.”
He added: “Confidence will remain fragile for some time and the possibility of another spike in Covid-19 cases as we adapt to the “new normal” is an obvious danger.”