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Consumer confidence in the UK hits the lowest point in 2021

Oct 15, 2021 United Kingdom
Consumer confidence in the UK hits the lowest point in 2021
Consumer confidence in the UK has returned to pre-pandemic levels, but it has reached its lowest point in 2021 due to inflation and concern over supply chains and empty shelves
According to PwC’s latest consumer confidence index, consumer sentiment confidence returned to the levels reported in December 2019. And, while it is at the lowest level seen in 2021, it is still higher than any point between the period following the EU referendum. “It’s little surprise that consumer sentiment has not maintained the record levels we saw earlier in the year. But with confidence stronger than last year – and for most of the post-referendum period – it’s not all bad news”, commented Lisa Hooker, Leader of Industry for Consumer Markets, PwC UK.

The survey, conducted between the 17th and the 20th of September 2021, includes responses from a nationally representative sample of 2 070 adults and indicates an overall positive sentiment, as more respondents thought they would be better off in the next 12 months than worse off. Nevertheless, the answers also show a sentiment decline in almost every age group.

Consumer sentiment has declined significantly among the older age groups, with all the respondents over 45 years old in negative numbers. Those between 55 and 64 years old became the least optimistic group. The respondents under 45 years, however, remain largely positive. Those inquired from 25 to 34 years old have maintained the sentiment reported in June, and the youngster under 25 years old are still the most optimistic group. Even so, the sentiment has fallen the fastest among the younger age group. PwC points out that the end of furlough and fewer job opportunities for graduates could be having an impact. Usually, it would be expected a bump in their confidence motivated by the return to university or entering the workforce.

Around half of those surveyed reported to have experienced either grocery price inflation or utility/petrol price inflation. A similar number expects inflation to continue in the next months. PwC noted that the survey was conducted before the failure of several large utility companies and current petrol shortages, which can indicate that the figures would be higher if the survey was done now. Most respondents have witnessed empty shelves at supermarkets and are said to be expecting shortages in stock as holidays approach. PwC has warned that these factors, combined with the problems in supply chains, are starting to affect consumers’ day-to-day lives and, in turn, sentiment and demand.

Image credits: Veronika Koroleva on Unsplash

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