CONFIDENCE among UK shoppers fell into negative territory for the first time since June 2020, according to new analysis.

YouGov and the Centre for Economics and Business Research said with UK energy bills set to continue increasing and inflation rising all over the world, the overall index fell by 4.2 points in August from 103 to 98.8, the largest decline since the early stages of the Covid-19 pandemic.

The fieldwork for the study took place over the month of August, before Liz Truss took office as Prime Minister and announced her plans to freeze energy bills at £2,500 a year for a typical household.

Measures tracking household finances for the past 30 days fell by 3.1 points from 60.3 to 57.2, but outlook for the next 12 months crashed by 10 points from 51.8 to 41.8, which was the lowest scores for the metric – which has been net negative since August 2021 – on record.

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YouGov/Cebr said every other metric also saw worsening scores. Homeowners became more likely to perceive their short-term house values negatively, while outlook for house prices plummeted by 7.2 points from 132.1 to 124.9.

Overall, businesses and consumers alike are more likely to feel the pinch than they were before, and less likely to believe that things will improve in the next year.

Kay Neufeld, head of forecasting at Cebr, said: “Following a short-lived improvement in July, the 4.2-point fall in the Consumer Confidence Index in August represents the steepest decline since the early days of the Covid-19 pandemic and drags the headline index into overall pessimistic territory.

"The index was led lower by cratering sentiment regarding future household finances, as warnings about the upcoming increase to the energy price cap reached a climax in August."

Emma McInnes, of YouGov, said: “This latest dip in consumer confidence exemplifies a longer trend of sustained decline. In spite of July’s small uptick, this data from August sees our Index score entering negative territory for the first time since the early days of the pandemic in June 2020. And, despite the fieldwork for this study taking place before Liz Truss took up office and announced her plan to freeze energy bills for the average household, it’s clear that the new Prime Minister is facing an uncommonly dour public mood, particularly in terms of personal finance.”