MNI: UK Consumer Confidence Deteriorates Further in July: GfK

--UK July GfK Consumer Confidence Index -10 Vs -9 June

     LONDON (MNI) - UK consumer confidence retreated for a second straight month

in July, with the summer heatwave and the month's major sporting events proving

ineffective in boosting consumer sentiment, the latest survey by GfK found.

     The headline index slipped from -9 in June to -10 in July, falling back to

February's level and registering below its 12-month average for the first time

in five months. The index has stood at, or below zero, consistently since

February 2016.

     --CONSUMERS MORE CAUTIOUS

     The decline in July's GfK Consumer Confidence Index (CCI) was driven by

falls in three of its five sub-indices. Consumers' perceptions of both their own

personal finances and the general economic situation over the next 12 months

deteriorated in the month, with both indices declining by a point, to +5 and -26

respectively.

     --BIG PURCHASES DOWN

     The major purchase index recorded the biggest move in July, down two points

to -2, suggesting that households remained reluctant to part with sizeable

chunks of their disposable income.

     This was perhaps in part explained by the month playing host to the 2018

football World Cup, Wimbledon and unusually warm weather -- factors which appear

to have distracted consumers from hitting the shops and/or prompted them to

increase food and drink purchases at the expense of discretionary spending.

     Consistent with reduced spending appetites, the survey's Savings Index,

which does not contribute to the Overall Index Score, rose by a point to +9 in

July -- almost double the reading of +5 registered a year ago.

     --OUTLOOK REMAINS GLOOMY

     According to Joe Staton, Client Strategy Director at GfK, given the

backdrop of the UK's impending exit from the European Union, it is difficult to

see where an uptick in confidence could stem from.

     "In the medium-term, and during the uncertainty in the run-up to the UK

leaving the European Union in eight months, it is hard to forecast what kind of

good news will change the numbers from negative to positive, or indeed where

such good news would originate," said Staton.

     "And in this environment, any bad news such as a surprising uptick in

inflation with the expectation of a corresponding increase in interest rates, or

any adverse political event either at home or abroad, would likely have an

exaggerated downward drag on consumer confidence," he added.

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

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