Soaring costs for energy and food in the UK are hitting consumer confidence, a new survey suggests.
The Consumer Confidence Index from YouGov and the Centre for Economics and Business Research (Cebr) fell by 4.2 points in August, from 103.0 to 98.8, as inflation put pressure on household budgets.
This takes the index into negative territory for the first time since June 2020.
Both household finance measures — for the last 30 days and the outlook for the next 12 months — declined, falling by 3.1 points and 10 points respectively.
In fact, every measure in the survey showed worsening scores, including the outlook for house prices which dropped by 7.2 points to 124.9 and job security which was down 2.4 points to 118.5.
The survey was taken between 1 and 31 August, before Liz Truss was appointed as prime minister and announced her plan to freeze energy bills at £2,500 a year for a typical household.
“The index was led lower by cratering sentiment regarding future household finances, as warnings about the upcoming increase to the energy price cap reached a climax in August,” explained Kay Neufeld, head of forecasting at Cebr.
“While the announcement of the energy price freeze by the new Prime Minister Liz Truss is expected to alleviate some of the most pressing concerns, weaker sentiment has spilled over into the other constituent metrics of the index.
“Most notably, consumers are more downbeat about the future value of their own home as rising mortgage rates are expected to trigger a price correction in the property market.”
