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British Consumer Confidence Hits 50-Year Low as Inflation Erodes Income

GfK, a market research institute, has reported that British consumer confidence has fallen to a 50-year low in January, marking the first drop in three months, due to concerns about the economy and rising costs of living. The Consumer Confidence Index dropped three points to -45 in January, the lowest level since data collection began in 1974. Analysts had anticipated the index to rise to -40 from December’s -42.

The report emphasizes the impact of increasing commodity prices and uncertain economic conditions on UK households, including a rise in the number of consumers with lower incomes. According to the Office of National Statistics (ONS), food and energy prices in England have soared in recent months, putting a strain on household income. In December, food prices rose 16.8% year-on-year, the highest increase since September. Additionally, the average cost of energy spending for UK households is expected to rise to £3,000 ($3,697.50) per year from April.

GfK’s Director of Client Strategy said, “As inflation starts to impact the cost of living, and with the prospect of a sharp spike in energy prices soon, we expect the consumer confidence index to weaken significantly this year.”

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