An increase in the number of people fearing for their jobs has driven a fall in consumer confidence, according to the latest Consumer Confidence Survey from Nielsen and the British Retail Consortium.
Three-quarters of people questioned in the quarterly survey said job prospects in the country would be not so good (48%) or bad (26%) over the coming year. That compares with 20% who felt job prospects would be bad in the Q2 survey.
Also adding to the drop in confidence is a worsening of sentiment over personal finances. There has been a six percentage point increase in the number of people who believe that prospects for their own personal finances are not so good, with 48% believing this now compared to 42% in Q2.
The economy remains the nation’s biggest concern, though this has eased slightly. In Q2 39% of people cited the economy as their first or second biggest concern. This has now fallen to 26% of people’s worries turn from the economy in general to their own ability to cope. Since the Q2 survey there has been a significant rise in the number of people who are concerned about increasing utility bills, from 15% to 23%, food prices, from 12% to 20, and personal debt, from 19% to 20%.
Chris Morley, group managing director Nielsen UK & Ireland, said: “This survey was conducted in anticipation of the recent spending review which outlined the extent of budget cuts.
“It tells us that consumers are clearly concerned about inflation, underpinned by a sustained and increasing worry over jobs. With such unease about covering basic costs, it is not surprising that many people claim they have no spare money to spend and that the majority are attempting to make savings.
“The level and depth of promotions in the grocery sector remains at an all. We expect similar tactics to be employed on the high street to help drive seasonal spending and we watch with interest to see if this will release some pressure on consumer confidence leading up to Christmas.”
Stephen Robertson, British Retail Consortium director general, said: “Consumer confidence is now down to its lowest for a year and these results suggest prospects for the early part of next year are fragile. People’s fears about their job prospects for 2011 are the main cause. Despite tentative indicators of recovery, four out of five people still think we’re in recession and more than half believe that won’t have changed by next autumn.
“With spare cash short and cutting back rising up the household agenda, a strong revival in consumer confidence is likely to be some way off.”