Consumer Confidence Declines in the UK
Consumer confidence in the UK has dropped for the third month in a row. It is now at its lowest level since July 2023. A survey by Opinium for the British Retail Consortium (BRC), conducted from October 6 to October 9, shows that economic expectations fell to minus 40. This is down from minus 34 in September. Sentiment about personal finances also worsened, dropping to minus 18 from minus 15.
Despite this overall decline, consumer expectations for retail spending rose sharply to 15 in October. This is up from five in September. The increase is linked to the upcoming Christmas season, although concerns about inflation remain. BRC chief executive Helen Dickinson said, "Consumer confidence in the economy dropped…against a backdrop of rising inflation and ongoing geopolitical tensions."
Separate data from S&P Global shows that consumer confidence has hit its lowest point in over three years. About 57% of households expect higher interest rates. The BRC's index indicates that the net expectation for personal finances is now at the second-lowest level on record. Additionally, consumer price inflation rose from 3.1% to 3.5% year-on-year as of September, which is higher than economists predicted.
Businesses are urging Chancellor John Healey to address what they call a "tsunami of costs" affecting their operations. Dickinson stressed the need for government action, stating, "Households everywhere will be looking to the Chancellor to tackle the cost of living challenge at next week’s Budget."
Related coverage: UK Unemployment Falls to 4.7% as Job Vacancies Decline.
The drop in consumer confidence is likely to affect retail sectors. Rising inflation and interest rates may limit spending. Retailers could struggle to boost consumer spending without tax relief. Investors will be watching for measures in Healey’s upcoming budget. These measures could influence consumer behavior and the economic outlook.
Based on reporting by: standard.co.uk, cityam.com