How confident are you feeling about the state of your finances? Unfortunately, it could have taken a knock recently, with the latest GfK Consumer Confidence Barometer finding that consumer sentiment has plummeted since the referendum result was announced.
The core index has fallen by eight points in the last two weeks and now stands at -9, marking the sharpest fall in 21 years (since December 1994) as consumers react to the prospect of splitting from the EU. Interestingly, sentiment has even turned negative among those who voted to leave, although they were still more optimistic than remainers (with scores of -5 and -13 respectively).
All of the key measures used to calculate the index have fallen, with a particularly sharp drop seen in terms of the UK's economic outlook. Indeed, sentiment towards the general economic situation over the next 12 months fell by a significant 15 points to stand at -29, with 60% of respondents expecting the economic situation to worsen in the next year, up from 46% who said the same in June.
Just 20% now expect it to improve – down from 27% – while 33% expect prices to rise rapidly in the next 12 months, up from 13% mere weeks ago. This has driven the major purchase index to fall by 12 points to stand at -3, another significant downturn. Unsurprisingly, sentiment towards consumers' personal financial situation has also dropped, down six percentage points to stand at +2.
Joe Staton, head of Market Dynamics at GfK, said that these were "extraordinary times", and that "during this period of uncertainty, we've seen a very significant drop in confidence, as is clear from the fact that every one of our key measures has fallen.
"Our analysis suggests that in the immediate aftermath of the referendum, sectors like travel, fashion and lifestyle, home, living, DIY and grocery are particularly vulnerable to consumers cutting back their discretionary spending."
Are you worried about what lies ahead? These are unprecedented times, and many are understandably concerned about the state of their finances. But there are things you can do to get a bit more certainty and take back control of your money – here are a few things to bear in mind:
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