Consumers Losing Confidence
An increasing number of Britons are becoming worried about their finances, according to a new study.
In a current study carried out by Gfk NOP, it was revealed that the nation’s financial situation has continued to get worse. The research company announced that the overall index which measures Briton’s opinions on the economy slipped to -29 over the course of Might. Such a figure represents a fall of five points from the -24 seen in April and down from -2 which was recorded this time last year.
The company’s index measuring buyers perception over their personal financial situation during the past 12 months was shown as falling by three points to stand at -11, the lowest figure recorded since the end of 1995. However, predictions over how they will manage money over the next 12 months is similarly grim. This index is at -4, a fall of 17 points from May 2007.
As a result of such worries about their personal finances, it is quite possible that consumers are finding it hard to meet demands on their monthly bills, such as credit cards, loans and household bills.
In addition, the measure tracking how the economy as a whole has fared over the past year is at -58, a drop of 40 points from the study carried out a year ago and the lowest figure recorded for longer than 15 months. On top of that, expectations about the country’s general financial situation stands at -39.
Research from the company also showed that the index taking measure of whether or not consumers believe that it is a good time to make a major buy has continued falling. Such a measure was indicated to be currently standing at -32, a fall of 8 points from April data and 36 below Might last year. The recent figure was also reported to be the smallest score ever recorded since Gfk NOP began its study in the early 1980s.
However, for prospective buyers who are considering making a buy, which could include a vehicle or house, using personal loans to finance such buying may be advisable.
And with people having such concerns about their finances, it may be possible to think that more people will want to lend more thought towards putting money away for the future. However, it would appear that this is not generally the case as the index that tracks whether people think it is currently a good time to plan for the future has reduced. Down by three over last month to stand at +25, it now stands ten points lower than during the corresponding period in 2007.
Speaking about the results, Rachael Joy, from GfK NOP’s consumer confidence team, said: “UK consumer confidence continues its decline and we are seeing levels not recorded since 1990; we’re at a massive 27 points lower than this time last year. Buyers’ confidence in the economy over the next year, plus a reluctance to make major purchases, reflect the popular expectation of a recession – both these measures are at the lowest level on record. The future months might see even further fall in confidence, as rising inflation and dropping home prices make reigning in their spending even more apt to the UK consumer”
Those people with concerns about their capability to manage their finances over the remainder of this year could be recommended to take out a cheap loan. In doing so, this may allow consumers to deal with various constraints on their spending at once, leaving them with a single inexpensive repayment to make each month. This might be of assistance to a significant number of buyers after Michael Coogan, director general for the Council of Mortgage Lenders, expressed disappointment at the Bank of England’s decision to maintain interest rates last month. He claimed that even though most people should be able to cope, the housing and mortgage markets will encounter problems over the course of 2008. Mr Coogan advised those concerned about their capability to manage their money to contact their loan officer or a financial advisory service immediately.
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