The mood of the nation is now best described as sombre. With the cost-of-living crisis being fuelled by rampant inflation, the threat of recession and even stagflation, it is no surprise that consumer confidence in the UK has dropped to its lowest level for nearly 50 years.

This is a painful point to have arrived at. UK consumer confidence is now even lower than it was when the biggest crash since the 1920s depression blew up in 2008 with the bank-led financial crisis. That crisis led to a recession that officially lasted for five quarters between Q2 2008 to Q2 2009 – a combined fall of GDP of 6.2 per cent. Austerity caused a drag on the economy that went on for a decade that was finally branded ‘the great recession.’ And consumer confidence today confidence is worse than at any moment during that time – or for that matter, the recessions of each decade back to the 1970s.

The UK consumer confidence index fell 2 percentage points to minus 40 in May – its lowest level since records began in 1974, said research company GfK, reported by The Times this morning.

The survey measures how people view the state of their personal finances and wider economic prospects. Joe Staton, client strategy director at GfK, said: “Consumer confidence is now weaker than in the darkest days of the global banking crisis, the impact of Brexit on the economy, or the Covid shutdown.”

This moment signals the battle that lies ahead. Households are now tightening their belts as soaring inflation, which reached a 40-year high of 9 per cent last month is hitting incomes hard. Around 40 per cent of households are already struggling to pay bills. Over one million households are expected to be pulled into poverty by the time next winter is over.

Recession is now being forecasted, as is a prolonged period of price pressures and probably an increase in household incomes – stagflation now beckons.