28th September 2015
Consumer confidence took a hit last month as anxieties rose over the strength of the job’s market according to research from Lloyds.
The bank’s latest Spending Power index dropped for the second consecutive month during August taking the measure to its lowest point since May this year.
The analysis found that the fall was largely influenced by continued declines in confidence towards the country’s employment situation where the latest official numbers showed that overall unemployment increased by 10,000 during the three months ending in July.
Sentiment towards people’s personal financial situation fell by 1 percentage point (-1pp) and job security was off 2pp.
However, sentiment towards the country’s financial situation and the UK housing market have both seen improvements on last month, increasing by 5pp and 4pp respectively.
The latest Lloyds Banking Group economic data shows that year-on-year essential spending fell at a slower rate in August, at -1% than it did in July, which hit 1.1%.
This was driven by an increase in spend on food and drink in August which accounts for around 40% of each person’s essential outgoings. Despite this, there were further reductions in year-on-year spending on fuel and water bills contributing to people’s essential spending being 1% lower than 12 months earlier.
Claire Garrod, head of personal current accounts at Lloyds Bank, said: “Spending power confidence took a step back for a second consecutive month in August, wiping out the improved sentiment that had built since May. However, levels of essential spending are still lower than they were a year ago, which suggests this blip in confidence may just be a mid-summer slow-down during the holiday season.”