Consumer confidence has plummeted by almost half over the past twelve months, according to Nationwide's Consumer Confidence Index.
Nationwide says gloomy economic data, falling house prices, job losses and the rising cost of living are among consumers’ main concerns.
The Consumer Confidence Index fell from 62 points in June to 51 points last month, a fall of 18%. Confidence is now 46% lower than a year ago, the largest falls ever recorded.
Two thirds of people believe the current economic situation is bad, while a staggering 85% believe things will be worse in six months time.
The rapid deterioration follows two months of relative stability in consumer opinions, possibly due to rapid house price falls and heavy job losses in recent months.
Fionnuala Earley, chief economist at Nationwide, explains: “The continuing downward trend in consumer confidence is not surprising given the recent batch of poor economic data. Talk of the increasing chances of a recession, more weakening in the housing market and the continuing rise of food and energy costs will have further dented confidence as will reports of job losses.”
The proportion of consumers concerned about a lack of jobs over the next six months has increased from 34% to 42%, while 64% believe now is bad time to make major purchases such as houses and cars.
House price expectations also fell, with consumers now expecting prices to fall 4.8% over the next six months.
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