Consumer confidence and sales slide in August

Consumer confidence has suffered its biggest fall since the early days of the pandemic, according to researchers and furnishing sales fell back in August.

The Consumer Confidence Index (CCI) fell by 4.2 points in August from 103.0 to 98.8, as inflation, largely driven by energy price rises, piles pressure on people ahead of winter. Benchmarked at 100, above that figure consumers are generally optimistic, below 100 they are pessimistic.

Furniture and lighting retail sales declined by 3.3% year-on-year in August as price inflation failed to keep the value of sales positive in the category, according to data today from the Office for National Statistics (ONS).

The confidence survey was taken by YouGov and the Centre for Economics and Business Research (Cebr) between 1 and 31 August, before Prime Minister Liz Truss announced the energy price freeze deal which may help support confidence in the months ahead.

Kay Neufeld, head of forecasting at Cebr, said: "Following a short-lived improvement in July, the 4.2-point fall in the Consumer Confidence Index in August represents the steepest decline since the early days of the COVID-19 pandemic and drags the headline index into overall pessimistic territory.

"The index was led lower by cratering sentiment regarding future household finances, as warnings about the upcoming increase to the energy price cap reached a climax in August.

"While the announcement of the energy price freeze by the new Prime Minister Liz Truss is expected to alleviate some of the most pressing concerns, weaker sentiment has spilled over into the other constituent metrics of the index," she said.