British consumer confidence has plummeted to a new all-time low this month as families grapple with the ever-rising cost of living and face months of strikes, a survey showed on Friday.
Market research firm GfK said its consumer morale index, which was launched 48 years ago, fell to -41 in June, from -40 in May, below the level that previously preceded recessions.
Economists polled by Reuters had expected the index to stay at -40.
“With prices rising faster than wages, and the prospect of strikes and rising inflation causing a summer of discontent, it will surprise many that the index has not fallen further,” said Joe Staton, client strategy director at GfK.
“Consumer sentiment is currently darker than in the early stages of the COVID pandemic, the 2016 Brexit referendum result, and even the shock of the 2008 global financial crisis, and now there is talk of an impending recession.”
Since the previous GfK report in May, Finance minister Rishi Sunak had announced a new round of support measures for households facing the highest inflation since the early 1980s, which is expected to peak at more than 11% in October.
Last week, the Bank of England raised interest rates for the fifth time since December and said it was prepared to act “vigorously” if necessary.
British Railways have been hit by strikes this week as workers demand higher wages, and unions representing other workers are also considering holding strike actions, further reinforcing the sense of a pressured economy.