Bleak May for consumers

UK consumer confidence was at an all-time low in May, with a third of respondents having serious economic concerns.

The British Retail Consortium (BRC) UK Consumer Confidence index now stands at 79 points, compared to 91 a year ago – as fears of rising inflation, a slumping economy and falling house prices combine with the credit crunch.

"The fact that the score has plummeted a further 12 points is telling of how much consumers are being stretched," said Mike Watkins, senior manager at Nielsen, which compiled the data.

"Our survey reveals that 55 per cent of people ranked inflation as their main concern during periods of economic downturn while 39 percent said high interest rates.

"Unfortunately they are being hit with both at present. This has caused significant unease among consumers."

Behind inflation and higher interest rates, unemployment and falling property prices were cited as the greatest worries if the economy slumped – by 38 per cent and 25 per cent respectively.

The poll also showed 22 per cent of people have no spare cash.

BRC director general Stephen Robertson added: "With one in five people saying they have no spare cash, the highest-ever recorded by this survey, customers are telling us they are cutting back on spending on all sorts of non-essentials.

"It's clear we are seeing the effects of customers' concerns about the future and about their own levels of debt."

When asked about major concerns, the economy was cited by 31 per cent of people, followed by debt (26 per cent), work/life balance (20 per cent) and immigration (16 per cent).