According to analysis from the Centre of Economics and Business Research (CEBR) and YouGov, consumer confidence in the UK is at its lowest for 6 months.
The Consumer Confidence Index (CCI) analysis shows that in September consumer confidence stood at 107.7, down on 109.0 in August. Any score over 100 means more consumers are confident than unconfident but analysts say it is still below where it was prior to the 2016 referendum. The last time it was near to this level was in March at 107.6.
What the data reveals about consumer confidence.
Data about consumer confidence is collected every day by YouGov. It conducts over 6000 interviews a day. Consumers respond to questions about job security, house prices, business activity and their household finances for the previous 30 days and also looking ahead for the following year.
What the data shows is some improvement in three areas over the past month. These were business activity, household finances and job security. On the downside, 5 measures showed declining consumer confidence. Two notable areas were in the house price score, both for the last month and for the year ahead. These areas have fallen to their lowest levels since 2013.
Analysts believe that the decline in forward looking measures of consumer confidence is linked to the ongoing Brexit negotiations. It doesn’t help that there are only months to go before the UK is due to leave the EU with no deal yet in place.
Consumers are sceptical about what will happen in the coming years. This has cast doubts over future business activity as well as the values of homes, property prices and household finances. Once there is more clarity over what will happen after Brexit, consumer confidence could bounce back. However, just now that confidence is at its lowest level for 6 months.
The slowdown in the housing market is a concern for many homeowners.
House prices rose only slowly in September. Compared with the same month last year, prices rose by 2%. This did remain slightly above some economists’ forecasts of 1.9%’
It is unchanged since August and showing the slowest growth in 5 years. The rise in house prices has remained week since the 2016 referendum.
Nationwide – ‘slow growth over the coming year.’
Nationwide economist Robert Gardner said: –
“Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year, though borrowing costs are likely to remain low “Overall, we continue to expect house prices to rise by around 1 percent over the course of 2018.”
House prices based on Nationwide’s index were rising by about 5% a year at the time of the referendum decision to leave the EU in June 2016.
Since then, many households have seen their spending power pinched by inflation. Inflation has risen faster than pay. Uncertainty about Britain’s economy outside the EU has also weighed on the property market.
Nationwide said prices rose by 0.3 percent in September from August when they fell by a monthly 0.5 percent.
London showed least growth with prices actually falling by 0.7% in the 3 months to September, compared with the same months last year, making it the 5thquarterly fall in a row. Prices are rising in some regions such as Yorkshire and the East Midlands,
However, prices in the capital are only about 3 percent below a record high hit in early 2017. Prices in London are still more than 50 percent above their 2007 levels, Nationwide said.