Consumers feel bad about feel-good factor

Almost half of consumers think it will take more than two years for the feel-good factor to return to the economy.

In the latest research by Mintel, 42% of those surveyed made that prediction, while 22% believed it would take between one and two years.

Just 2% of consumers think the feel-good factor is already here, and only 4% believe it will return within the next six months.

Mintel’s head of UK financial services research, Toby Clark, said: “For a few months in spring, people seemed a little more upbeat. But this apparent spring bounce in confidence has faded. Consumers have drifted back into the pessimism that has characterised the national mood over the last year or so.

“Firms need to get used to this downbeat mood. Consumers themselves expect the tough times to last for years, not months, and the financial scars left as a result of the slowdown will take a long time to heal.

“If, as many consumers expect, the elusive feel-good factor won’t be returning for another couple of years, we will have seen more than half a decade of austerity. This can’t help but have a fundamental – and long-lived – impact on attitudes.”

Not everyone is struggling. Currently, 20% of consumers claim they have not been affected by the slowdown – a figure that has remained relatively steady month on month – with 57% claiming to have felt manageable effects.

However, the number of people claiming to have been hard-hit by the slowdown is rising. In May, this had fallen to 20% but by October almost a quarter were saying that the slowdown had had a major impact on their finances – well above the number seen while the country was technically in recession.

Mintel says that there has been no collapse in confidence, and that the proportion of people struggling or in financial trouble remains steady at around a tenth of the population. But there is little joy around. Just a fifth say their finances are healthy enough to allow them to put money aside every month or indulge in a few luxuries.