Consumer confidence falls as Budget nears

Consumer confidence has fallen, with the British Retail Consortium’s index dropping to -34 in September from -28 in August. The decline follows four months of improvement, with households becoming increasingly concerned about their finances and reluctant to increase spending in shops. Speculation over potential tax rises in the upcoming Budget has intensified as economists warn of a deterioration in the UK’s fiscal position.

According to BRC-Opinium data, consumer expectations over the next three months of their personal financial situation worsened to -15 in September, down from -9 in August.

Helen Dickinson, Chief Executive of the British Retail Consortium, said “Consumer confidence in the economy stumbled after four months of improvement, with a similar trend for sentiment around personal finances. This decline was much sharper among women and with households bracing for a sharp rise in energy costs this winter, and bills rising faster than shop prices, it is little surprise that expectations of retail spending fell, even as overall spending plateaued.

“With the Budget looming large, consumers want to see Government prioritise bringing down the cost of living. Retail will play its part, but the Chancellor must not compound the triple blow from escalating employment costs, energy bills, and business rates, allowing retailers to focus on holding prices down. He should start by freezing the business rates multiplier, preventing yet another burdensome tax increase.”