More QE stimulus likely as confidence dips to key –20 level


September’s headline GfK consumer confidence measure for the European Commission* slipped back 2 points to the –20 level, following a 4-point rise in August, the first since last February. Unlike a year ago there is no ‘back to school’ September bounce. Confidence this year is 4 points lower than in September 2009.


A rise in pessimism about economic prospects and personal finances are behind the decline. Both future measures are well down on a year ago – by 10 and 23 points respectively. Backward looking measures of the economy and personal finances also declined, although to a lesser extent. Of the five sub-measures comprising the headline index, only the measure of the economy now compared to 12 months ago is higher - -46 currently compared to –63 a year ago.


With the Deputy Governor of the Bank of England this week suggesting people should spend rather than save in the short term, the only CCI component measure to rise is in the spending climate, up 5 points to –15, the same as a year ago suggesting people do feel there are good deals available on household goods. At the same time, fewer people believe the savings climate is good (43%) down from 44% in August.

However savings intentions rose this month compared to unchanged spending intentions suggesting that in reality people are more likely to save (or repay debt) than spend - as has been the case for most of the past year.


Lower take home pay and job prospects have been features of recent months.  The measure of expected unemployment worsened in the September survey and is weaker than a year ago when the economy was emerging from recession.


With the measure falling back to the –20 level of low/no growth in prospect, further QE stimulus measures are likely to be announced.


*Survey of 2,001 adults aged over 16, representative of the Uk population, conducted by telephone between 3-10 September.


For a complete picture of the mood of the UK consumer subscribe to the UK Consumer Confidence Monitor. For a complimentary copy visit the free Members area. To discuss your consumer intelligence needs contact John Gilbert at or ring 0208 944 7510 / 07740 027968.