UK consumer confidence at lowest since Thatcher riots

With rising inflation, food bills and fuel costs, UK consumer confidence is at its lowest since the Thatcher Riots. A heavy fall in June in the index of consumer confidence by GfK NOP Ltd fell by 5 points to -34.

Rachel Joy, a researcher at GfK, said that it is no real surprise that consumer confidence is so low as it has been affected by rising inflation and continued bad press speculating on interest rates and soaring prices, making it difficult to see how the future will be brighten.

With the turmoil that the economy is facing, it is ironic that the confidence index is only one point higher than in March 1990 which was just before the country last fell into recession.

Confidence in the economic outlook has also fallen by 6 points to -45 and ,in general, people’s attitudes towards the economy are increasingly negative. Personal debt is increasing and house values are tumbling.

As inflation continues to spiral, this may prevent the Bank of England (BoE) from cutting interest rates any further.

Meanwhile, crude oil rose above $141 a barrel and corn, wheat and rice prices have all reached records this year which have fuelled inflation to 3.3 percent in May.

The cost of living has soared as a result of the hike in energy and food prices although Mervyn King suggested that the BoE are confident that inflation will be brought back to target levels, although he did not indicate the role interest rates would play in it.

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