U.K. consumer confidence was unchanged this month and is unlikely to improve after data this week showed the economy slid into its first double-dip recession since 1975, GfK NOP Ltd. said.
An index of sentiment held at minus 31 from March, the London-based research group said in an e-mailed report today. The median estimate in a Bloomberg News survey of 20 economists was for an increase to minus 30. GfK surveyed 1,998 people from March 30 to April 15.
Prime Minister David Cameron said on April 25 he was “very disappointed” with data showing the economy shrank in the first quarter. He said his government won’t backtrack on plans for the biggest fiscal tightening since World War II, even as consumers are squeezed by wage growth that’s lagging behind inflation and unemployment close to a 16-year high.
“The figures this month will not offer the government any relief in light of the news that the economy has slipped back into recession,” Nick Moon, GfK Social Research managing director, said in the report. “There are no signs either within the survey or in the recent economic figures to suggest any immediate improvement.”
A measure of shoppers’ assessment of their personal finances over the past 12 months rose 2 points to minus 23 this month, and an index of their views on the economy over the period rose 2 points to minus 57, GfK said. Their views on the climate for making major purchases rose 1 point to minus 30.
Consumers’ assessment of their financial situation in the coming 12 months fell 3 points to minus 13, and a measure of their outlook for the economy fell to minus 33 from minus 30.
The 0.2 percent first-quarter contraction has left output 4.3 percent below its peak in early 2008, before the financial crisis struck. Consumers are under strain with inflation at 3.5 percent and wage growth of 1.1 percent.
The Bank of England’s next policy decision will be announced on May 10, when officials will have new quarterly economic forecasts. Policy maker Martin Weale said yesterday the case for extending stimulus “is stronger” after the GDP data. The matter is “a decision I’ll come to” next month, he said.
To contact the reporter on this story: Jennifer Ryan in London at email@example.com
To contact the editor responsible for this story: Craig Stirling at firstname.lastname@example.org