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Consumer confidence in the UK is declining due to rising cost of living and rising prices

Consumer confidence in the UK has plummeted in the last 11 months as people worry about rising inflation and oil prices, meaning that rising house prices are lowering household revenues.

The UK’s consumer-oriented index, which monitors people’s perceptions of their wealth and financial expectations, dropped by four points to 19 January, according to a GfK company survey.

This was the lowest reading rate since February 2021, when the country was very closed, and what experts expect it will not change from last month.

Joe Staton, GfK’s customer service manager, said “while there is good news about the reduction of Covid bans, consumers are striving for higher prices, higher oil prices and hopes for higher interest rates.”

All parts of the index were damaged. However, the collapse of consumer expectations over their next year’s economy and the sharp decline in the number of people who think this is a good time to buy big things were a major concern for the UK’s recovery because they are. closely related to personal finance systems.

“The fall of four points on the big buy list shows that people are ready to fasten their seat belts,” Staton said.

Consumer spending has been a major driver of the UK economic recovery. In the third quarter, domestic consumption contributed significantly to economic growth, resulting in a 1.2 per cent increase in 1.3 per cent and a quarter of all household items.

The GfK series, based on interviews that took place between January 4 and 12, does not reflect Wednesday’s announcement of a reduction in Covid bans. But Staton said there was no doubt that the situation would be urgent “because it is a biological crisis that worries us here and this will affect us in the coming months”.

On Wednesday, the National Statistics Office reported that consumer prices rose sharply in the 30 years of December. Economists predict that inflation will peak in April when Ofgem, the country’s energy regulator, raises its inflation target.

The GfK data chime containing ONS statistics published Thursday showed that in the first half of January two-thirds of those in the UK also said their living price had risen last month. About nine in 10 of the alleged food prices have risen and about 8 out of 10 are said to be due to rising electricity prices.

Linda Ellett, head of consumer marketing, entertainment and retail markets at KPMG UK, said their research shows that about one-third of consumers have reduced their smart spending in 2022 due to inflation.

“Lower living costs also make those who were able to save time during the epidemic save money, use it to cut costs, or save money they want to spend this year,” he added.

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