UK consumer morale tumbles to 22-month low

British consumer confidence tumbled to its lowest in almost two years in January, hit by rising inflation, a increase in value-added tax and a looming programme of public spending cuts, a survey showed on Friday. The GfK NOP consumer confidence barometer slid 8 points, the sharpest monthly slump since the recession of 1992, to a 22-month low of -29.
Declines were registered in all five categories, with the "climate for major purchases" index the hardest hit following the rise in VAT to 20 percent from 17.5 percent at the start of the month. Nick Moon, managing director of GfK NOP Social Research, called the drop an "astonishing collapse in consumer confidence", and said the rise in VAT - a key part of the government's austerity drive - had hit people hard.