In our Economic Prospects report we said that we expect consumer spending to be weak this year, as a slow recovery in the labour market and below-inflation wage growth continue to subdue demand. One of the indicators we are watching is the consumer confidence index, which was released today.
GfK NOP's Consumer Confidence Index fell to -30 in July
Movements in GfK NOP's consumer confidence index are not always mirrored by similar movements in consumption, but the index does give an indication of consumers' mood and inclination to spend at any one time. Today's release shows that confidence fell across all sub-indices and, therefore, would suggest that consumption is likely to remain subdued. Concerns about personal financial situation in the next twelve months worsened, but the biggest drop, of 9 points, was in people's expectations of the performance of the economy over the next 12 months.