However, in view of the coincidence between this event and the ongoing saga, I will not do so today. Page | 5 Document Classification: Public
Chart 3: Consumer confidence and spending 10 Percentage change on 19Q4 5 Retail Sales (LHS) 0 -5  Headline Consumer Confidence (RHS)  Percentage point difference on 19Q4  Chart 4: UK Misery Index  10 5  Misery index  16  Forecast  14  0  12  -5  10  -10  -10  -15  -15  8 6 4  2022  2020  2018  2016  2014  2012  2010  2008  0  2006  -25  2004  -25  2  2002  -20  2000  -20  Sources: GfK/EC, ONS. Sources: ONS and Bank calculations  Notes: Headline consumer confidence is based on the  Notes: Index is summation of the unemployment rate and  average of five survey balances: general macroeconomic  inflation rate. Forecast is based on projections in Aug 2020  situation over the past 12 months and expectations for the  Monetary Policy Report. next 12  If the public do have an exaggerated sense of the risks they face, what might be its source? Psychological studies suggest it may reflect behavioural biases inherited from our hunter-gatherer past. Humans tend to over-estimate systematically risks that are systemic or existential to lives and livelihoods.4 This “dread risk” causes excessively cautious behaviour, sometimes with harmful side-effects – as when the exaggerated fear of flying after 9/11 caused more people to drive.5 These exaggerated risk perceptions are often amplified by others’ words and actions. Caution is contagious.