Submitted by: Shay Ramani
Summary: The Consumer Confidence Index dropped in the second month of 2017 by reaching an index figure of -6 as opposed to -5 in January. This shows a fall in the household spending as people want to save in order to limit the household budget. The best way to combat inflation and the price rise would be to make a price comparison of commodities and choose the cheapest deals.
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It is not an unknown fact anymore that a lot has changed in the UK since the vote to leave the EU in June last year. Inflation was the direct result of Brexit and the worst hit section are the shoppers who feel stressed to spend money on the bare necessities as well as household commodities.
According to the market research company GfK, shoppers showed a lot more joy in the beginning of the year by regaining their Consumer Confidence Index from -7 in December to -5 in January. However, the festivities of the New Year soon died down as the shopping index reached -6 in February.
The index had fallen consistently since November 2015 but recorded its lowest ever in July which is the immediate month after Brexit. This was also the biggest monthly drop in two decades when the index reached -12 giving strong suggestions that recession time was near.
However, the economy climbed back to -1 in September but has been slipping lower since October with the exception of January when it was recorded as -5, only due to the New Year shopping time.
Joe Staton, head of market dynamics at GfK expressed his views by saying that “Any momentum behind the post-Brexit, debt-fuelled, consumer-spending boom now appears to be softening.”
Statistics from GfK suggests that the purchase sub-index slipped from 10 to 5 and the ranking of personal financial situation over the upcoming 12 months showed a fall from 7 to 3. Even the savings index is showing a retrograde move by slipping to -4 in February from -2 in January.
Even though the figures are disappointing, the economy shows stronger hold than what was predicted by analysts and experts. It showed a recovery of 0.6% in September from its fall in June and a jump of 0.7% in the last quarter of 2016.
Experts attribute household spending as the main reason for this progress as business investment showed a big fall in 2016 since 2009. However, things may not be positive in the near future as the retail sales, which account for 30% of household consumption,fell by 0.3% in January as suggested by the Office for National Statistics.
This certainly points to the rise in inflation and further shrinking of household spending in the coming months, which could pull down total GDP growth. In its latest report, the Bank of England hinted that the household sector may just uphold the price crunch by maintaining household savings rate to 3.25%.
In short, people are not ready to spend and want to save to sustain their lives. The best way to make savings is to make a price comparison of commodities and services so as to choose the cheapest deals.
FreePriceCompare is one such comparison expert which offers its customers some of the cheapest quotes so that they can make bigger savings. To know more about our services, you can check our website https://freepricecompare.com/ or call our easily approachable and reliable team of UK price comparison experts on 02034757476.
About the Author: Shay Ramani is an avid financial analyst working at
FreePriceCompare.com
UK’s leading price comparison website. He suggests all UK households to
compare energy prices
and choose the best fixed price tariff online. All Big Six except British Gas announced price hikes in household energy prices. Shopping around is the best way to secure savings on annual energy bill.
Source:
isnare.com
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