The buying mood in August is worse than it has been since at least the mid-1970s. In addition to energy, food has also become noticeably more expensive.
London. UK consumer confidence fell to a record low in August amid the strongest inflation in 40 years. The measure of consumer confidence fell three points to minus 44, consumer researchers at GfK announced Friday regarding their monthly survey. This is the lowest level since at least 1974, when the UK Household Finance Survey began.
Economists had expected a weaker drop to minus 42 points.
Consumers surveyed rated their personal financial and general economic situation as worse. All values have fallen, GfK expert Joe Staton said, reflecting severe concerns about the rising cost of living.
The sense of desperation in the UK economy is the main reason for these results.
Experts are particularly concerned that food, in addition to energy, is also becoming much more expensive. Grieving about the future, Staton said that meeting their needs has become a nightmare: the crisis of confidence will only get worse as the dark autumn days and the cold winter months come.
UK inflation is now at its highest level in four decades, with the cost of goods and services increasing by 10.1 per cent in July from the previous year.
The most powerful driver of prices is energy. But people in the country also have to dig into their pockets when it comes to shopping for everyday needs: In retail, prices rose 12.3 percent, the highest rate since 1981.
Economists predict that the inflation rate could rise to 13% or more in the fall. A possible outcome of this stagnation could be longer on the island, which is also grappling with the throes of Brexit.
And a crisis of confidence among consumers follows unusual actions: for example, the British supermarket chain Iceland Foods offers its customers interest-free loans to buy groceries in light of very high inflation. The program targets poor families suffering from high cost of living.
Iceland Foods, which has more than 900 stores, works with the nonprofit lending company Fair For You. Financially vulnerable customers will be given small loans of 25 to 100 pounds – the equivalent of 30 to 119 euros – via pre-installed cards, which can be repaid once a week.
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