Insights
The Deloitte Consumer Tracker Q2 2017
Consumer confidence falls to its lowest level in over two years
July 2017
Consumer confidence has fallen for the third quarter in a row in the second quarter of 2017, a sign that the squeeze in living standards is starting to dent consumers’ spirits with inflation hitting its highest level in four years and wages dropping in real terms for the first time in three years.
Consumer confidence continues to fall
Consumer confidence has fallen by three percentage points (-7% to -10%) in the second quarter of 2017, representing the biggest decline in over two years. Five out of the six measures which make up the confidence index decreased this quarter. The biggest declines were seen in confidence in disposable income and level of debt, which fell by seven and four percentage points respectively.
Squeeze in living standards puts dent in consumers’ spirits
With inflation rising to its highest level in four years and the first decrease in real wages in three years, the pressure on disposable incomes is starting to show. Consumers are beginning to reduce their expansionary behaviours, with spending on essentials dropping 4 points this quarter and discretionary spending down by 3 points.
Looking ahead
The prospect of the UK leaving the EU continues to influence the outlook for growth. However, with unemployment currently at its lowest rate since 1975 and consumer credit increasing as a result of cheap debt, the question still remains as to whether these factors will be sufficient to ensure consumer spending slows rather than collapses before the end of 2017.
Deloitte Consumer Tracker Q2 2017
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