The confidence of UK consumers has fallen for the first time since 2013 as terrorism and immigration concerns escalate, says the Nielsen Global Survey of Consumer Confidence and Spending Intentions.
The latest results show that anxiety about terrorism has hit its highest-ever level, with 32% of UK consumers citing it as their biggest or second-biggest concern. This is more than double the level from a year earlier (13%). Immigration concerns have increased five percentage points over the same period to 22%.
In contrast, during 2015, worries about rising utility bills, rising food prices, the economy, job security and debt all fell.
However, despite these concerns the number of UK consumers feeling positive about making purchases has hit 52%. This is the first time this has risen above 50% since the question first appeared the survey nearly 10 years ago.
The number of consumers cost cutting to save money has dropped to 50%, the lowest level since this question appeared in the survey in 2009.
Overall, the UK Consumer Confidence Index dipped two points to 101 in Q4 2015, from 103 in Q3. This is in stark contrast to confidence across the whole of Europe, which has increased four points to 81. However, despite the fall the UK still remains as Europe’s second-most confident country, behind Denmark. A score of more than 100 indicates degrees of optimism - below 100 indicates degrees of pessimism.
“Consumer concerns about terrorism and immigration have risen considerably. We’re closely watching for any effects these demographic and political issues may eventually have on consumer spending,” says Nielsen UK & Ireland managing director Steve Smith. “In general, big and unexpected events would likely be the most disruptive for consumers.”
“For the first time, our study shows the majority of UK consumers are now feeling positive about spending.”
He says this is due to a number of favourable factors such as the large number of retail promotions, falling fuel prices and supermarket price wars. The result is that consumers have more disposable income, which has increased their spending on leisure and entertainment.
The Nielsen study, established in 2005, measures attitudes each quarter on topics including personal finances and job prospects among 30,000-plus internet consumers in 61 countries.
The global Consumer Confidence Index stands at 97.