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May 20, 2022, 3:05 a.m. EDT

UK Consumer Confidence Falls to Record Low as Cost of Living Crisis Intensifies

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By Xavier Fontdegloria

Confidence among British consumers fell in May to its lowest level in at least five decades as high inflation continued to weigh on households moods and squeezed real incomes.

The consumer-confidence barometer compiled by research firm GfK declined to minus 40 in May from minus 38 in April, the lowest level since the survey began in 1974. The index, which gauges consumers' views on the general economy and their personal finances, has decreased for six consecutive months.

Economists polled by the Wall Street Journal expected the indicator to be unchanged from the previous month.

"Consumer confidence is now weaker than in the darkest days of the global banking crisis, the impact of Brexit on the economy, or the Covid-19 shutdown," GfK's Client Strategy Director Joe Staton said.

British consumers' views on the economy and their finances have plunged over the last six months largely due to the spread of the Covid-19 Omicron variant followed by the jump in inflation, which is causing a sharp decline in real incomes.

U.K. annual inflation reached a four-decade high of 9% in April as rising energy prices fed through households' utility bills. Economists expect inflation to remain high for the remainder of the year due to high commodity and food prices.

Four of the five measures that form the headline confidence index fell in May compared with the previous month, with broad-based pessimism that is more evident when consumers are asked about prospects for the economy.

"The outlook for consumer confidence is gloomy, and nothing on the economic horizon shows a reason for optimism any time soon," Mr. Staton said.

The GfK survey was carried out between April 30 and May 12.

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

By Xavier Fontdegloria

Confidence among British consumers fell in May to its lowest level in at least five decades as high inflation continued to weigh on households moods and squeezed real incomes.

The consumer-confidence barometer compiled by research firm GfK declined to minus 40 in May from minus 38 in April, the lowest level since the survey began in 1974. The index, which gauges consumers' views on the general economy and their personal finances, has decreased for six consecutive months.

Economists polled by the Wall Street Journal expected the indicator to be unchanged from the previous month.

"Consumer confidence is now weaker than in the darkest days of the global banking crisis, the impact of Brexit on the economy, or the Covid-19 shutdown," GfK's Client Strategy Director Joe Staton said.

British consumers' views on the economy and their finances have plunged over the last six months largely due to the spread of the Covid-19 Omicron variant followed by the jump in inflation, which is causing a sharp decline in real incomes.

U.K. annual inflation reached a four-decade high of 9% in April as rising energy prices fed through households' utility bills. Economists expect inflation to remain high for the remainder of the year due to high commodity and food prices.

Four of the five measures that form the headline confidence index fell in May compared with the previous month, with broad-based pessimism that is more evident when consumers are asked about prospects for the economy.

"The outlook for consumer confidence is gloomy, and nothing on the economic horizon shows a reason for optimism any time soon," Mr. Staton said.

The GfK survey was carried out between April 30 and May 12.

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

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