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Consumer confidence falls in run up to Budget

Consumer confidence fell again in June as speculation about spending cuts and tax rises in the lead up to the Budget dampened confidence.

The GfK NOP Consumer Index dropped by one point from May to -19, making June the fourth month in a row that the overall confidence level has dropped.

However, year-on-year confidence improved by six points, according to the findings.

Confidence about people’s personal financial situation during the last year decreased one point to -14, which is four points higher than this time last year.

In the general economic situation, confidence on the outlook for the next year fell three points to -12. This is four points lower than June 2009.

Attitudes towards making a major purchase worsened three points to -24.

Managing director of GfK NOP Social Research Nick Moon said: “The ongoing debate around spending cuts and speculation around tax hikes in the lead-up to the emergency Budget has impacted consumer confidence, with gains from December to February now lost.

“Concerns about the fragility of the recovery and the potential for a double-dip recession may be exacerbated by the fall in confidence in the general economy. The outlook for major purchases has also dropped, which suggests the government cannot rely on consumers to fuel growth.”

The research was carried out on behalf of the European Commission.

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