According to forecasts by the Bank of England, the British economy is likely to grow by a very healthy 3.5% in 2014. If this figure does materialise it will be the highest growth rate the country has experienced in the last ten years. However, the average British consumer is not sharing the much publicised euphoria about the country’s economy.
A survey released by research firm GfK last week indicated that the morale of British consumers has declined from a recent high in September as British families become less optimistic about the outlook for the country’s economy as a whole, and their personal financial situation in particular. The company’s headline consumer confidence index showed an unexpectedly large drop to minus one last month, after posting a reading of plus one in August, on par with the 9-year high reading of June.
The decline in September was mainly driven by a large drop in household expectations regarding personal financial situations and the outlook for the economy over the next year.
According to Gfk’s MD for social research, Nick Moon, it was likely that the index would remain around this level because consumers were not seeing the benefits of strong economic growth in the form of wage growth or improved living standards.
He added: “Many people are not themselves feeling any better off despite the growth in GDP, and this may be tempering the impact of positive media coverage of the economy.”
British households also continue to struggle with personal debt issues and many individuals are now seeking professional advice about debt consolidation, IVA’s and bankruptcy.