Consumer confidence in the UK economy falls – London Business News | Londonlovesbusiness.com

Three in five people say that the UK economy is worsening, leading even consumers feeling financially secure to cut back on spending, according to the latest quarterly Consumer Pulse survey from KPMG in the UK.

The number of people feeling that the UK economy is worsening grew by fifteen percentage points in the last three months to 58%.

But despite the perception of a downbeat economic picture, the majority (55%) of people currently feel financially secure (which is just 2 percentage points lower than the previous quarter).

The research gauged the confidence of 3000 UK consumers and assessed their buying behaviour over the last quarter (December – February).

Those feeling insecure about their finances grew from 21% to 24% over the last three months, but within that only 15% of people reported that their finances are such that they are having to actively cut discretionary spend to pay for essentials – with a further 2% saying they are incurring debt to pay bills.

The growing negative economic perception is leading more consumers to take spending action than those who say their financial situation means they need to, with:

• 43% saying they are reducing spend on everyday items.
• 36% saying they are saving more as a contingency.
• 29% saying they are deferring big ticket purchases.
• 19% feeling less inclined to leave their current employment.

Reflecting upon the findings, Linda Ellett, Head of Consumer, Retail and Leisure for KPMG UK, said: “Our research continues to show that while only a minority of consumers feel financially insecure, the majority feel that the economy is heading in the wrong direction.

“And this nervousness about the economy is leading many, including some of those who are secure in their current personal financial circumstances, to cut everyday spend, defer big ticket buying, and save more.

“Some may be taking this action as they prepare for higher costs, such as a new mortgage deal or the higher cost of travel.  But other cautious consumers are certainly preparing for the potential impact on them from what they believe to be a worsening economy.  This week’s Spring Statement needs to give people the confidence in the longer-term UK economic outlook.”