Consumer confidence plunged in February amid a “perfect storm” of price rises, increased taxation and interest rate hikes, a long-running survey shows.
GfK’s Consumer Confidence Index fell seven points to minus 26 this month.
The headline score is the lowest since January last year – one of the worst points in the Covid crisis.
Worries about the onslaught of pressures on household finances saw every measure of the survey fall on a month ago.
Confidence in personal finances and the wider economic situation over the next 12 months suffered the biggest drops, down 12 points and 11 points respectively.
The index measuring changes in personal finances over the last 12 months fell five points to minus 11, three points worse than a year ago, while the outlook for the coming 12 months is now 18 points lower than last February.
The major purchase index, a measure of consumer confidence in buying big-ticket items, fell by five points to minus 15, but is four points higher than a year ago.
GfK client strategy director Joe Staton said: “Fear about the impact of price rises from food to fuel and utilities, increased taxation and interest rate hikes has created a perfect storm of worries that has shaken consumer confidence.
“There’s clear anxiety in these findings as many consumers worry about balancing the household books at the end of the month without going further into debt.
“Slowing consumer spend slows the wheels of the UK economy so this is unwelcome news. And the good news on the easing or lifting of Covid restrictions around the UK seems to be doing little to lift the public’s mood.”
Linda Ellett, head of retail and leisure consumer markets at KPMG, said: “No longer facing Covid-19 restrictions, many businesses will have envisaged a consumer feel-good factor at this point of the pandemic. But despite the recent boost to retail sales, the cost-of-living storm clouds are threatening to rain on the parade.
“It’s little surprise in a landscape of rising costs of goods, bills and taxes, that despite the improvements in Covid outlook, consumer confidence is falling.”