The latest GfK consumer confidence survey indicated that headline confidence fell by 3 points to -22 in July. This outturn marks the fifth consecutive month that confidence has fallen, and was a slightly larger fall than the consensus had expected (consensus: -20, BarCap: -21).
 
The slight worsening in headline confidence in July was largely driven by a marked deterioration in assessments of the economic outlook over the coming year; the balance measuring this fell by 13 points to -25, its lowest level since March 2009 (although a seasonal adjustment of the data indicates that July saw a slightly smaller fall of 8 points, the picture is very much unchanged - see chart below). Additionally, the other forward-looking component balance - respondents' assessments of their own finances over the coming year - also weakened in July. The balance measuring this fell by 4 points to -6, its lowest level since March 2009.
 
June's survey dates had not covered the Budget on 22 June, which means that the weakness in July's forward-looking component balances likely reflects consumers' concerns surrounding the fiscal austerity measures announced in the Budget. Although the move in consumers' expectations for the economy was quite dramatic, we would note that consumer confidence had been trending lower for some time prior to the Budget.

source: BarCap