Consumer and investor confidence slumps amid 'acute concern'

Consumer and investor confidence slumps amid 'acute concern'

Consumer and investor confidence has plunged as concerns over the cost of living crisis and an economic slowdown grow.

GfK’s monthly consumer confidence index showed an overall drop in consumer confidence of three points in August this year to the lowest since the survey began in 1974.

This was across all areas of the survey, including participants’ predictions for their own personal finance situation in the next year, as well as the economic outlook.

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Client strategy director at GfK, Joe Stanton, said: “All measures fell, reflecting acute concerns as the cost-of-living soars.”

Source: GfK

A sense of exasperation about the UK’s economy is the biggest driver of these findings, he said, pointing to a sense of “capitulation”, with financial events moving beyond the control of ordinary people.

“With headline after headline revealing record inflation eroding household buying power, the strain on the personal finances of many in the UK is alarming,” Stanton said.

He added that sentiment around the general economy over the past year has decreased each months since December last year.

The survey questioned 2,000 individuals above the age of 16 between August 1 and 12.

Professional pessimism

Meanwhile, 38 per cent of professional investors believe the current level of risk in financial markets is high, with 41 per cent saying markets are at their most risky since the introduction of quantitative easing in 2009.

Censuswide surveyed 102 professional investors between June 6 and 10 this year.

This risk has led over half (53 per cent) of asset allocators to increase their exposure to commodities, 52 per cent to illiquid alternatives and 51 per cent to gold.

Deputy chief investment officer at Fulcrum Asset Management, Abeel Abdoula, said: “There’s no doubt that investors are experiencing a more risky market environment in more traditional asset classes (ie, equities and bonds), and sensing that, it’s no surprise that commodities, illiquid alternatives and gold are in favour as investors look to mitigate the current conditions.”