Consumer confidence falls

GfK’s consumer confidence index has fallen by one point from -20 in September to -21 in October, the lowest reading since March.

The fall is thought to be due to anxieties over potential tax rises at the Budget next week outweighing optimism over falling inflation.

However, GfK’s major purchase index rose by two points to -21 in the same period, suggesting that this demand could increase if the Bank of England continues to lower interest rates. Three measures declined and two rose compared to September’s announcement. 

Neil Bellamy, Consumer Insights Director, NIQ GfK, said “Consumer confidence fell one point this month to -21, taking the score back down to the level last seen in March this year. Also falling one point are both personal financial situation over the last 12 months and general economic situation over the next 12 months. The largest drop though was in our view of the general economic situation over the last 12 months, down five points to -42.

“On the plus side, the major purchase index rose two points and future personal financial expectations by one point. As the Budget statement looms, consumers are in a despondent mood despite a fall in the headline rate of inflation. This month’s Consumer Confidence Barometer paints a picture of people holding their breath to see what’s in store for them on 30th October.”