Falling house prices and fears over job security have dented consumer confidence in the UK, which has seen its biggest drop in two years.
According to the consumer confidence index compiled by Yougov and consultancy group the Centre for Economics and Business Research (CEBR), consumer confidence fell to 108.4, down 1.4 points from April.
While this still means that a majority of UK consumers are confident about the economy, the score is still considerably below where it was before the Brexit referendum in 2016.
The survey, conducted through over 6,000 interviews a month, asks respondents about household finances, property prices, job security and business activity, both over the past 30 days and looking ahead to the next 12 months.
The data shows that while confidence in household finances has increased, consumer confidence in job security, house value and business activity declined.
People’s confidence in their job security over the coming year has decreased by four points from last month, its biggest monthly fall since July 2013.
Both the backward and forward-looking house value and business activity metrics have also cooled in May.
However, household finances over the past 30 days have improved for the fifth month in a row, while anticipated household finances over the coming 12 months are at their highest level since September 2016, the study showed.
Nina Skero, head of macroeconomics at CEBR said: “Consumers have taken note of the UK economy’s recent woes and adjusted their expectations accordingly.
“The measure of future job security has seen the greatest fall in nearly five years and prospects for house values and business activity are also looking bleaker.
“If confidence doesn’t recover soon it could damage second quarter growth prospects, which is especially undesirable given the weak performance at the start of the year.”
Source: City A.M.