Consumer confidence dips in July ahead of possible autumn tax rises
Brits’ confidence ticked down in July despite sunny weather, with caution building ahead of possible tax rises in the government’s autumn Budget.
Sentiment dipped by one point to -19 in July, according to GfK’s Consumer Confidence Index.
The measure for the general economic situation of the country during the last 12 months fell one point to -44; 12 points worse than in July 2024.
Expectations for the general economic situation over the next 12 months fell one point to -29, putting confidence 18 points lower than in July 2024.
Neil Bellamy, consumer insights director at GfK, an NIQ Company, said the data was “worrying”.
“The data suggests that some people may be sensing stormy conditions ahead,” he added.
Bellamy put the drop in confidence down to “speculation growing over possible tax rises in the autumn Budget” as well as “price pressure”, which is contributing to current and future inflation.
The Bank of England has been urged to hold interest rates in August to help battle rising inflation.
Meanwhile, lower-than-expected economic growth and multiple government U-turns has opened up a hole in the government finances, which is likely to be plugged by a combination of freezing income tax bands and limits on cash ISAs.
The British Retail Consortium’s sentiment index also dropped in July, with Brits’ confidence in the state of the economy taking a particular dive.
“Rising inflation, particularly for food, has put more pressure on personal finances, increasing the cost of living,” Helen Dickinson, chief executive of the British Retail Consortium, said.
“With the UK economy shrinking for the second consecutive month, it is little surprise that consumer confidence fell in July,” she added.