Consumer confidence falls

GfK figures show talk of tax hikes and spending cuts have taken their toll
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According to market analyst GfK, consumer confidence dropped in June for the fourth consecutive month.

The firm states the ongoing debate around spending cuts and speculation around tax hikes in the lead-up to the emergency budget impacted confidence, with gains from December to February lost.

In 2009 consumers were actually feeling more positive about the economy. By September/October, consumers were saying that they expected to be better off in the next 12 months. However in the last three months consumer confidence has dropped with consumers now expecting to be worse over in the next 12 months.

It also claims the 'outlook for major purchases' has dropped, which could have an impact on the theory that consumers may fuel wider economic growth.

Meanwhile disposable income has actually not reduced for a lot of people – things in that regard haven’t changed very much over the last two or three years, apparently.

In the technology sector specifically, GfK estimates in May IT product sales rose 5.1 per cent, telecoms by 11.5 per cent, photography by four per cent, and consumer electronics on the whole were down 4.7 per cent.

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