Election result leads to consumer confidence hit

Pronounced collapse
Pronounced collapse

Consumer confidence has collapsed following Theresa May’s General Election catastrophe as household finances come under renewed pressure and fears over the housing market rise.

Data from YouGov and the Centre for Economics and Business Research (CEBR) shows a “pronounced collapse” in confidence following the election - falling from 109.1 in the week before the vote to 105.2 after.

The figures are at levels comparable to the aftermath of last year’s vote to quit the EU, when consumer confidence plummeted from 111.9 in the weeks before the referendum to 104.3 in the days after it.

Stephen Harmston, head of YouGov, said: “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.”

Inflation hit its highest level for nearly four years in May at 2.9%, tightening the squeeze on consumers already struggling due to low wage growth.

On Monday, a report by the British Bankers’ Association showed consumer borrowing eased back last month as inflation’s upward march forced shoppers to rein in their spending.

Mortgage approvals also fell 3.3% in May as the housing market stutters.