Confidence slumps - a tipping point?

Consumer confidence in the UK has slumped to its lowest level in 18 years. The latest consumer confidence barometer from GfK/NOP shows overall confidence in prospects for the economy dropped five points to -34 in June, only one point above the record low of -35 reported in March 1990. Plenty of reports on this today - here is the link to the Guardian’s coverage and also to the Times.

We should remember the usual caveats about this being a survey subject to sample error and that people’s expectations of where the economy is heading does not always correlate with their own experiences. The hard numbers on jobs, real take-home pay, housing repossessions and mortgage costs will have a heavier bearing on spending decisions in the near term. But these confidence numbers are truly dire and seem to suggest to me that 2009 will be a very difficult year for the UK economy.