(Bloomberg) -- UK consumer confidence slipped into negative territory for the first time since the pandemic lockdown in the middle of 2020, with homeowners more concerned the value of their property could be at risk.
Most Read from Bloomberg
YouGov Plc said its reading of sentiment dropped 4.2 points to 98.8 in August. Pessimism fed into perceptions about where house prices are headed, job security and the outlook for personal finances.
The survey, done before Prime Minister Liz Truss announced measures to protect households from rising energy costs, reflects a tightening squeeze on living standards. Inflation is close to a 40-year high, driving up the cost of goods and services of all kinds.
“The new prime minister is facing an uncommonly dour public mood, particularly in terms of personal finances,” said Emma McInnes, global head of financial services at YouGov, a market-research firm.
Asked about their financial situation in the coming year, households were more pessimistic than at any time on record. The outlook for house prices also fell sharply. Consumers “were more likely to perceive their short-term house values negatively,” the report said.
Mortgage costs have risen to the highest since 2016 after the Bank of England raised its benchmark lending rate six times since December to quell inflation. Investors anticipate the Bank Rate will rise to 4.5% next year from 1.75% currently, with a half-point hike almost certain next week.
“Consumers are more downbeat about the future value of their own home as rising mortgage rates are expected to trigger a price correction in the property market,” said Kay Neufeld, head of forecasting at the Centre for Economics and Business Research, which contributed to the survey.
London House Prices Lag as UK Delivers Biggest Jump Since 2003
UK Outlook Dims With Consumers Paying More to Buy Less in Shops
The World’s Hottest Housing Markets Are Facing a Painful Reset
UK House Prices Rise Led By Surge in London, Halifax Says
UK Homebuyer Inquiries Fall to Lowest Since Start of Pandemic
Most Read from Bloomberg Businessweek
©2022 Bloomberg L.P.