Consumer confidence low ahead of ‘inevitable’ post-furlough job losses
Consumer confidence remained low throughout August ahead of “inevitable” redundancies when the government winds down the coronavirus job retention scheme.
According to the latest research, consumer confidence was minus 27 this month, flat compared to July’s reading.
However, the coronavirus pandemic has seen optimism plummet since August 2019, when consumer confidence stood at minus 14.
Consumers were slightly more optimistic about their personal financial situation over the next 12 months, but experts warned this could be reversed when unemployment is expected to rise over the next few months.
The government will close its furlough scheme, which partially covered the salary of temporarily laid off staff, on 31 October.
Joe Staton, client strategy director at GfK, which produced the research, said: “Circumspect consumers report they are more confident about their personal financial situation over the next year but the uptick from zero up to one does not amount to much, and this can change quickly when furlough ends and the inevitable redundancies start.
“Employment is now the big issue because the pandemic has ended years of job security.”
The Major Purchase Index also ticked up one per cent month-on-month. However it remained 26 points lower than it was in August last year.
Staton added: “Yes, discounted dinners have proved a winner with hungry consumers across the country this month, but it’s difficult to see any increased appetite for other types of spending for now.
“While our Major Purchase Index managed to increase by one point in August, the economic headwinds are not favourable as we enter the key retailing months at the end of the year.”