Consumer confidence has collapsed following the general election at the beginning of June, data from YouGov and the Centre for Economics and Business Research (Cebr) has revealed.
The Consumer Confidence Index for the month is at 106.9, its second-lowest level since the summer of 2013. The only time it has been worse was just after last year’s Brexit vote.
The analysis showed that in the first eight days of June - before the results were known - the YouGov/Cebr Consumer Confidence Index stood at 109.1, around the same level it was at before the snap election was declared. However, in the 12 days after the votes were counted it fell to 105.2. This was similar to what was measured in the period around last June’s referendum on EU membership when consumer confidence fell from 111.9 in the weeks before the vote to 104.3 in the days after it.
The decline in consumer confidence was driven by two specific factors - the sharp decline in optimism over property prices and the continuing ‘slow puncture’ of people’s household financial situations.
However, the data has suggested that job security and business activity measures, both for the past 30 days and the next 12 months, were proving relatively resilient.
“Consumer confidence has been generally ticking downward since last autumn, but the events of the past month have placed it under greater pressure,” said Stephen Harmston, head of YouGov Reports.
“The hung parliament seems to have further dampened consumers’ spirits, which were already sinking following the continued squeeze on household finances. But the real cause for alarm will be the cooling of the property market, as this is one of the key things that has propped up consumer confidence over the past few years.”
Douglas McWilliams, deputy chairman at the Cebr, said that indecisive result of the election had “seriously affected” economic prospects already dampened by Brexit uncertainty.
“The data shows a sharp drop in consumers’ confidence about their own financial situation and even more so about house prices. This will affect spending in the high street, in shopping centres and online,” he said.
“Meanwhile business confidence is also likely to have dropped. Our preliminary assessment is that economic growth will fall sharply over the coming months and the country will only be saved from recession by strong international trade.”