British consumer confidence remained severely depressed in July as cost-of-living pressures and dim economic prospects continued to build.
The consumer-confidence barometer compiled by research firm GfK steadied at minus 41 in July, the lowest level since the survey began in 1974 and in line with economists’ expectations.
“The impact of soaring food and fuel prices and rising interest rates continues to darken the financial mood of the nation,” GfK client strategy director Joe Staton said.
U.K. inflation hit a new four-decade high of 9.4% in June, the highest rate among the Group of Seven economies.
Consumer confidence hints at households’ willingness to spend, one of the major drivers of the U.K. economy.
The current subdued confidence levels have historically been associated to economic recessions. The British economy unexpectedly expanded in May, but economists say there is a high probability the country falls into a recession later this year.
In July, most components of the consumer-confidence barometer were broadly unchanged, a sign that concerns over the general economic situation among consumers remain acute.
However, Britons’ assessment of their personal financial situation over the next year rose slightly in what could be a reflection of optimism over imminent change at the top of the U.K. government.
“Against this financial backdrop, the U.K. electorate is looking for a new leadership with a commitment to unleashing growth, tackling inflation and cutting taxation,” Staton said. “The successful candidate will need to deliver a much-needed shot in the economic arm of the country if they are to help improve consumer confidence,” he said.
The GfK survey, which polled around 2,000 individuals, was carried out between July 1 and 12.