Consumer confidence fell this month to levels last seen at the start of the year following recent government warnings of “tough choices” in next month’s budget.
GfK’s Consumer Confidence Index slipped seven points to -20, with all measures down in comparison to the August figures:
The most significant drops were in predictions for personal finances and the general economy over the coming year amid concerns that consumers could face a further squeeze on their budgets as the government looks to raise extra taxes to stabilise the public finances. The Major Purchase Index also fell significantly, suggesting people will hold back on their spending despite easing inflation pressures and the prospect of further interest rate cuts in the coming months.
Neil Bellamy, Consumer Insights Director, GfK, noted that the data was not encouraging news for the new government. He said: “Strong consumer confidence matters because it underpins economic growth and is a significant driver of shoppers’ willingness to spend. Following the withdrawal of the winter fuel payments and clear warnings of further difficult decisions to come on tax, spending and welfare, consumers are nervously awaiting the Budget decisions on 30th October.”
NAM Implications:
- When will politicians recognise and acknowledge real-world conditions for UK consumers that have lost at least 20% of their purchasing power since Lockdown?
- These GfK’s Indices provide the details…
- i.e. Cash-strapped consumers will continue to rein in their spending…
- …buying less non-food and switching from brands to own-label equivalents…
- …for as long as it takes to feel comfortable/safe/trusting.
- You name it…
