July 30, 2008 / 11:26 PM / 11 years ago

Consumer sentiment hits record low

Pedestrians walk past a Boots branch in Leicester, June 9, 2008. REUTERS/Darren Staples

LONDON (Reuters) - Consumer confidence hit a record low this month as people became increasingly despondent about their own personal finances, a survey showed on Thursday.

The GfK NOP index fell five points to -39 in July, the lowest since the survey began in 1974, highlighting the uphill struggle facing Prime Minister Gordon Brown if he is to regain public support before the next election, expected in 2010.

“There seems to be any little sign of any relief either, with the growing spectre of the economy going into recession,” said Donna Culverwell of GfK.

The index measuring people’s expectations over the next 12 months fell nine points to -18, the lowest since 1994. The perception of the economy was even worse, with the index falling seven points to -52, the lowest since the series began in 1982.

Consumers have been hit by plenty of reasons to feel glum — rising unemployment, muted wage growth, a slowing economy and the highest inflation rate in more than a decade.

Many argue the actual cost of living is rising much faster than official records show. Electricity and gas suppliers, for example, are ramping up prices.

Gas-owner Centrica said on Wednesday it would raise gas prices by some 35 percent. That followed an announcement by supplier EDF earlier in the month that it would raise prices on both power and gas bills by about a fifth.

GfK said the major purchases measure fell by two points to -37, also a series well and sure to make grim reading for retailers of furniture and white goods who are already suffering because of a downturn in the housing market.

Interviewing for the survey was between July 4 and 20.

Reporting by Sumeet Desai; editing by David Christian-Edwards

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