U.K. consumer sentiment fell more than economists forecast in June, erasing part of the boost brought from public holidays as Britons lost confidence in the economy, a report by GfK NOP Ltd. showed.
An index of sentiment slipped 4 points to minus 25 from May, when it increased 10 points, the London-based research group said in an e-mailed report today. All five measures of the index declined, with confidence in the economic outlook for the next year dropping 3 points to minus 18.
“It was almost inevitable that there would be a drop in confidence in June following last month’s unique, feel-good circumstances of public holidays and the royal wedding,” GfK Social Research Managing Director Nick Moon said in a statement. “As we move into the summer, the outlook for the beleaguered high street remains a gloomy one.”
Britons’ confidence in the recovery is faltering as inflation squeezes incomes at the fastest pace since the 1970s. Public-sector workers are striking today to protest against government job cuts and curbs on pensions. The economy stagnated in the six months through March and the Bank of England says the recovery remains fragile.
The pound fell against the dollar today and traded at $1.6029 as of 1:58 p.m. in London, down 0.2 percent since yesterday.
GfK’s measure of consumers’ view of their personal financial situation over the next 12 months fell 5 points to minus 8 in June, while their view of the past year declined 2 points to minus 20. A gauge of Britons’ willingness to make major purchases dropped 1 point to minus 27.
Gross domestic product rose 0.5 percent from the fourth quarter, barely enough to erase the contraction recorded in the final three months of 2010. Real incomes fell last year for the first time since 1981 and the U.K. Treasury predicts a further drop this year, marking the first back-to-back decline since the 1970’s oil crisis and recession.
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