Embargoed: Not for publication before 00.01, 26 June 2017
Consumer confidence slumps in wake of hung parliament
- June data shows pronounced collapse in consumer confidence following the election – falling from 109.1 in week before the vote to 105.2 in period after it
- Overall consumer Confidence Index for the month drops to 106.9 – only slightly higher than immediate aftermath of EU vote
- Consumer confidence driven down by weakened household finances and cooling property prices
- But optimism about business activity and job security remains steady
UK consumer confidence slumped sharply after the indecisive result of the general election, falling to levels comparable to the immediate aftermath of last year’s vote to leave the EU, the latest data from YouGov and the Centre for Economics and Business Research shows.
The analysis shows that in the first eight days of June – before the results were known – the YouGov/Cebr Consumer Confidence Index stood at 109.1, around the same level it was at before the snap election was declared. However, in the twelve days after the votes were counted, the Index fell to 105.2. This is similar to what was measured in the period around last June’s referendum on EU membership when consumer confidence fell from 111.9 in the weeks before the vote to 104.3 in the days after it.
YouGov is able to look at how specific events shape consumer confidence as it collects data every day, conducting over 6,000 interviews a month. Respondents are asked about household finances, property prices, job security and business activity, both over the past 30 days and looking ahead to the next 12 months.
Looking at the figures for June as a whole – combining both pre and post-election data – the Consumer Confidence Index for the month overall is at 106.9, its second-lowest level since the summer of 2013. The only time it was worse was just after last year’s Brexit vote.
The decline in consumer confidence is driven by two specific factors. The first is a sharp decline in optimism over property prices. In the past four years, both the backward and forward house value metrics have only been lower on one occasion – straight after the EU referendum.
The second is the continuing slow puncture of people’s household financial situations. Both the forward and backward-looking measures fell in June with household finances over the past month being at its lowest level since December 2014 and the metric for the year ahead being lower than at any point since December 2013.
However, the data suggests that the job security and business activity measures, both for the last 30 days and the next 12 months, are proving relatively resilient.
Stephen Harmston, Head of YouGov Reports: “Consumer confidence has been generally ticking downward since last autumn but the events of the past month have placed it under greater pressure. The hung parliament seems to have further dampened consumers’ spirits, which were already sinking following the continued squeeze on household finances. But the real cause for alarm will be the cooling of the property market, as this is one of the key things that has propped up consumer confidence over the past few years.”
Douglas McWilliams, Deputy Chairman at the Centre for Economics and Business Research: “It looks as though the indecisive result of the election has seriously affected economic prospects already dampened by Brexit uncertainty. The data shows a sharp drop in consumers’ confidence about their own financial situation and even more so about house prices. This will affect spending in the high street, in shopping centres and online. Meanwhile business confidence is also likely to have dropped. Our preliminary assessment is that economic growth will fall sharply over the coming months and the country will only be saved from recession by strong international trade. We will be releasing our updated forecasts next week and they will show a significant downward revision.”
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Notes to editors:
Please source all information to YouGov/Cebr.
Media enquiries:
Andrew Farmer, PR Director, YouGov
T: 020 7012 6157
Douglas McWilliams, Deputy Chairman, Cebr
T: 07710 083 652
About the YouGov/Cebr Consumer Confidence Index:
- The YouGov/Cebr Consumer Confidence Index collects data on a daily basis throughout the month, conducting up to 7,000 interviews per month and more than 77,000 per year online with people aged 18+.
- The sample is nationally representative and the YouGov/Cebr Consumer Confidence Index has a margin of error of +/-1.5%. The data is not seasonally adjusted.
- Current month’s data in the press release is provisional and based on 21 days’ worth of data. End of month scores may differ from the provisional figure.
- For further information about the YouGov/Cebr Consumer Confidence report please visit: http://research.yougov.co.uk/services/household-economic-activity-tracker/
The YouGov/Cebr Consumer Confidence Index is based on eight measures:
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Job security over the past month
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Based on the question: “Compared to one month ago, how secure do you think your job is?”
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Job security over the next year |
Based on the question: “How likely do you think it is that you will be laid off or let go from your job in the next 12 months?” |
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Business activity at your place of work over the past month
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Based on the question: “Compared to one month ago, how has the level of business activity at your place of work changed?”
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Business activity at your place of work over the next year
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Based on the question: “How do you think the level of business activity at your place of work will have changed 12 months from now?”
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House value over the past month |
Based on the question: “Compared to one month ago, how do you think the value of the property/dwelling in which you live has changed?”
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House value over the next year |
Based on the question: “Expected change in value of current dwelling, 12 months from now (among homeowners ONLY)”
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Household finances over the past month |
Based on the question: “Compared to one month ago, how has your household’s financial situation changed?”
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Household finances over the next year |
Based on the question: “How do you think your household’s financial situation will have changed 12 months from now?”
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About YouGov:
YouGov is an international, full-service market research agency and is the pioneer of market research through online methods. Our suite of syndicated, proprietary data products includes: BrandIndex, the daily brand perception tracker; Profiles, our new tool for media planning, market segmentation and forecasting; and Reports which provide comprehensive market intelligence on a range of sectors. The market-leading YouGov Omnibus provides a fast and cost- effective service for obtaining answers to research questions from both national and selected samples. Our custom research business conducts a wide range of quantitative and qualitative research, tailored to our specialist teams to meet our clients’ specific requirements.
YouGov has a panel of 3 million people worldwide, including over 600,000 people in the UK representing all ages, socio-economic groups and other demographic types.
As the most quoted market research agency in the UK, YouGov has a well-documented and published track record illustrating the accuracy of its survey methods.
For further information visit yougov.co.uk
About the Centre for Economics and Business Research:
Cebr – the Centre for Economics and Business Research – is a leading economics consultancy, founded in 1993 by Douglas McWilliams. Cebr has wide ranging experience and expertise on subjects from micro-economic impact studies to macro-economic forecasting across the UK, the Eurozone and global economy.
For more information and the latest reports from Cebr, please visit www.cebr.com