Dip in confidence reveals risks to economic growth
CONSUMER confidence dropped slightly in the fourth quarter of last year, adding a gloomier edge to a UK recovery which has so far been driven by an increase in consumer spending, according to figures released by Nielsen today.
The UK’s confidence level fell from a score of 87 to 84, with any number above 100 indicating general optimism.
The survey also suggests that stronger growth is not yet feeding through to many peoples’ perceptions: a shocking 71 per cent of respondents still believe that the UK economy is in recession.
The proportion of people who said they were changing their shopping habits to save money also climbed marginally, up from 63 to 65 per cent between the third and fourth quarters of 2013.
More than third of consumers point to climbing utility bills as the most pressing concern for their finances.
While the UK is still ahead of most other European countries in terms of optimism, Nielsen’s figures suggest the country is still lagging behind Germany and the US.
The figures may be a cause for concern for the UK’s economic recovery, which so far is largely based on rising consumer spending, as opposed to increased investment or exports.
A separate report released by BDO today suggests that the Christmas season was better than expected for mid-market stores, but adds that retailers are not out of the woods yet.
Like-for-like sales rose by eight per cent in the year to January, but online sales growth of 27.2 per cent helped to boost the figures.
“It is not until the high street settles down to normalised pricing in February that we will be able to see whether consumer confidence has got a toe hold and start to see how the year may unfold,” said Don Williams, BDO’s national head of retail.