LONDON (Reuters) - Consumer confidence has fallen to its lowest level since February 2009, adding to evidence that the economy is returning to recession, a survey by GfK NOP showed on Friday.
GfK said its consumer confidence index sank to -32 in October from -30 in September, a level last seen when the economy was in the depths of recession. A year ago, the index stood at -19.
“Consumers’ outlook is becoming increasingly pessimistic about the UK’s general economic situation over the coming year,” said GfK managing director Nick Moon. “The government can’t rely on people spending their way out of the double-dip recession that is likely to be on the horizon.”
Bank of England policymakers Paul Fisher and Martin Weale have warned that the economy faces a significant risk of contraction in the coming quarters — a danger that lay behind the Bank’s decision to restart its quantitative easing purchases earlier this month.
British retailers have reported mixed results in recent days, and a CBI survey on Thursday showed stores expected only a modest pick-up in the run-up to Christmas after the worst three months in more than two years.
GfK’s Moon said that on the two previous occasions that its index was this weak and the economy was not already in recession — in mid-2008 and early 1990 — recession followed a few months later.
The GfK index was pushed lower by a weakening in consumers’ assessment of the general economy and their willingness to make big purchases, although households’ personal financial situation had not declined from already-low levels.
The index was based on a poll of 2,000 people on behalf of the European Commission, conducted between September 30 and October 9.
Reporting by David Milliken; Editing by Catherine Evans