Consumer confidence falls

Consumer confidence in the UK has sharply declined, with the GfK consumer confidence index dropping to minus 20 this month, down from minus 13 in August.

The longest-running measure of consumer confidence nosedived, raising concerns about whether government rhetoric about Budget ‘pain; has overly worried the general public.

The index measuring changes in personal finances during the last year is down two points at -9; this is nine points better than September 2023.
The forecast for personal finances over the next 12 months is down nine points at -3, which is three points higher than this time last year.

Neil Bellamy, Consumer Insights Director, GfK, said “Headline consumer confidence has recorded a big fall this month to -20, taking us back to a similar level seen at the beginning of this year. All five measures are down but there are major corrections in the outlook for our personal financial situation for the next 12 months (down nine points), our views on the general economy for the coming year (down 12 points), and the major purchase index (down ten points).

“These three measures are key forward-looking indicators so, despite stable inflation and the prospect of further cuts in the base interest rate, this is not encouraging news for the UK’s new government. 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.”