Consumer confidence at lowest level since 1990s
Consumers’ confidence in their personal finances has fallen to its lowest level since 1995.
The Consumer Confidence index, compiled for the European Commission, shows that confidence about personal finances over the past year has dropped to a level not seen since April 1995, while optimism for finances over the next year is at its lowest level since September 1995.
Rachael Joy, from GfK NOP, the research firm that compiled the figures, says: “With rising inflation, gloomy forecasts for interest rates and soaring fuel, utility and food prices dominating the front page headlines, it’s no surprise that confidence in the general economy is almost in freefall. It seems unlikely that this trend will reverse in the near future”
The index also shows that confidence about the general economic situation is at its lowest level since December 1992 – while confidence about the outlook for the economy is at its lowest ever level since the index was launched in 1982.
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An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).