Consumer confidence at lowest levels since records began

UK consumer confidence has hit a record low after inflation hit double digits (10.1%) for the first time since 1982.

GfK's Consumer Confidence Index showed a decrease of three points in August to -44, the lowest since records began in 1974.

Joe Staton, client strategy director at GfK, had a bleak outlook for the months ahead. He said: "These findings point to a sense of capitulation, of financial events moving far beyond the control of ordinary people.

"With headline after headline revealing record inflation eroding household buying power, the strain on the personal finances of many in the UK is alarming. Just making ends meet has become a nightmare and the crisis of confidence will only worsen with the darkening days of autumn and the colder months of winter."

All five measures were down in GfK's survey in regard to both confidence in personal finances and the general economic situation.

Despite this, figures from the Office for National Statistics (ONS) showed that retail sales increased by 0.3% in July, although this was not enough to offset the 1.2% fall seen over the previous three months, which continued a decline that stretches back to summer 2021.

ONS director of economic statistics Darren Morgan said: "Retail sales nudged up very slightly in July, but looking at the longer-term picture, they are continuing the downward trend which started last summer." The Bank of England has predicted the UK will enter recession later this year, with the downturn lasting 15 months.