Consumer confidence dips in Q1 2016

Consumer confidence fell in the first three months of 2016, according to the latest Consumer Tracker from business advisory firm Deloitte. The quarterly survey of 3,000 UK consumers revealed a renewed caution in the consumer section, with confidence falling by 3% year-on-year in the first quarter of the year- from -5% to -8%. The fall in overall confidence was said to be driven partly by an “unusually large” seasonal decline in sentiment about general health and wellbeing. It said the trend was particularly pronounced this year, with the confidence reading for health and wellbeing falling by six points from the first quarter of 2015, to its lowest level since the survey began in the third quarter of 2011. Ben Perkins, head of consumer business research, said: “The UK’s consumers are increasingly health-conscious. The flu season arriving later than usual and extensive media coverage around health in the first three months of the year seem to have focused consumers’ attention on health and wellbeing as an issue. “In addition, the recent sugar tax debate, as well as the growing use of health and fitness wearables and apps may also be increasing consumers’ awareness of their own wellbeing.” According to the survey, the confidence gap between homeowners and non-homeowners is now at its widest point since the tracker began. Non-homeowners reported a four point fall in confidence from the previous quarter. Meanwhile, London-based consumers were said to be significantly less optimistic than consumers in other regions, with overall confidence in the capital falling by ten points year-on-year. Londoners’ confidence towards job security fell by six points and disposable income by nine points, compared to the previous quarter. In the coming months, consumers expect to spend more on essentials - such as groceries - and less on utilities and big ticket items. The tracker said this was possibly in anticipation of political and economic uncertainty in the short term.