Household finance measures in freefall as consumer confidence declines for the second month in a row

Christien PhebyContent Manager
April 08, 2022, 12:33 PM GMT+0
  • Consumer confidence deteriorates by 2.7 points  

  • Short-term (-8.8) and forward-looking (-10.6) household finance measures crater again 

  • Retrospective business activity measures see a three-point decline (-3.1)  

  • House value measures stagnate after four months of growth 

The cost of living crisis has dealt another record-breaking blow to the public’s confidence in their household finances, according to the latest analysis from YouGov and the Centre for Economics and Business Research (Cebr). The crash in both retrospective and forward-looking measures for this metric was the main contributor to the overall index declining by -2.7 points.  

YouGov collects consumer confidence data every day, conducting over 6,000 interviews a month. Respondents answer questions about household finances, property prices, job security, and business activity, both over the past 30 days and looking ahead to the next 12 months. 

This week, in a “desperately sad” move, Money Saving Expert Martin Lewis abandoned discounts and deals in favour of fleeces and footwarmers – advising consumers to "heat the human, not the home". Beyond the growing pessimism around utility bills, the war in Ukraine has contributed to a spike in petrol costs on the nation’s forecourts

Against this backdrop, household finance measures have found new lows for the second month in a row: retrospective scores tumbled from 71.5 to 62.6 (-8.8), while outlook saw a -10.6 point crash from 59.7 to 49.1. To put that in perspective, 12 months ago, the short-term measure was more than 30 points higher (94.1), while outlook scores were more than double those recorded last month (102.3).  

Elsewhere in the index, consumer sentiment was mostly negative or stagnant. Following four months of growth, both retrospective (-0.3) and forward-looking (0.3) house price scores saw little movement. Meanwhile, the short-term business activity metric, which tracks how busy employees say their workplace has been in the past month, fell from 113.9 to 110.8 (-3.1), while any changes in outlook were marginal (-0.3.)  

The only significant gains were in job security outlook, which rose from 118.6 to 120.8 (2.2.). These increases were not seen in the retrospective measure, with consumers reporting a one-point fall from 94.5 to 93.5.  

Emma McInnes, Global Head of Financial Services at YouGov: “The ongoing cost of living crisis and uncertainty caused by continued conflict in Ukraine has, once again, seriously impacted on both consumer confidence and the public’s household finances. For the second month running, tumbling household finance measures - both retrospective and forward-looking – find themselves at their lowest ever level since tracking began almost ten years ago. Aside from a small uptick in job security outlook, confidence and household finance figures, combined with house price scores stagnating after four months of growth, have largely contributed to the overall consumer index continuing to fall”

Kay Neufeld, Head of Forecasting and Thought Leadership at Cebr: “Consumer confidence continued on a steep downward trend, falling to 103.9 in March, which is the lowest level since January 2021, when the UK entered its third national lockdown. With inflation hitting 6.2% in February on the CPI measure, the cost of living crisis has well and truly arrived in the UK, which goes some way to explaining the dismay expressed by households looking at their financial situation. The limited measures announced by Chancellor Rishi Sunak in the Spring Statement have evidently failed to reassure the majority of consumers, while the substantial fall in the backward-looking business activity metric of 3.1 points to 110.8 suggests that the strain is starting to be felt by UK plc as well. Unfortunately, with the energy price cap rising in April and the war in Ukraine continuing to roil energy markets, consumers will face more hardship in the months to come. “