New study shows
New analysis from MoneySuperMarket can today reveal that consumer confidence plummeted in the first two weeks of June, as the nation prepared for a general election and then came to terms with the shock result of a hung parliament and the subsequent political and financial uncertainty.
With a mid-month score of 43.87, taking into account the first two weeks of June, the Index is down over three points compared to the end of May (47.00), 16 points year-on-year and at its second lowest level for almost four years (December 2013). If the downward trajectory continues, the end of June could see the score hit its lowest point since MoneySuperMarket introduced its Index, back in January 2013.
MoneySuperMarket analysed customer enquiry and application data across its loans and insurance channels during the first two weeks of June (1st – 14th), which compared against the same period last month reveals:
- A four per cent increase in the proportion of people looking for loans for debt
- A seven per cent decrease in the proportion of homes undergoing building works
- A six per cent decrease in the annual income of people searching for loans
Changes in these key consumer metrics all correlate with a decrease in consumer confidence.
Kevin Pratt, consumer affairs expert at MoneySuperMarket, said: “Nothing erodes confidence more than uncertainty, and we live in uncertain times. Little wonder we’ve seen our Consumer Confidence Index tumble 3.2 points in the space of two weeks, contributing to a decline of 16 points year-on-year.
“Political turmoil is largely responsible for the increased levels of anxiety people are feeling about their financial situation. With the Conservatives battling to build a majority in a ‘hung’ Parliament, there is less certainty about the Government’s ability to effect change, or even to sustain its policy programme.
“And, of course, there is Brexit. Will the General Election result mean a ‘softer’ Brexit than expected? Will the Prime Minister be forced to compromise in key areas, and how will this affect the value of Sterling on international currency exchanges?
“These are weighty questions, but consumer confidence rests just as much on how people feel when they look at their bank balances and credit card statements. As we enter holiday season and head in our millions to Europe, will our confidence be weakened further by the fact we’re only getting 1.10 euros to the pound?
“It seems the only thing we can be certain of at the moment is continued uncertainty. If this is to be the ‘new normal’, the impact on how confident we feel about our finances will be profound indeed.”