Consumer confidence in the economy dips following Budget
Consumer confidence in the health of the economy dipped in November, a new survey shows, as the Budget failed to allay households’ economic fears.
The British Retail Consortium’s (BRC) sentiment monitor showed that consumers’ confidence in the economy fell back to -19 in November, down two points from October.
The reading confirms that households’ optimism in the economy remained relatively depressed throughout the autumn, having improved significantly earlier in the year. In July, following Labour’s election, the reading briefly strayed into positive territory.
However, the survey also showed that consumers’ view of their own financial situation improved to -3, up from -4 the month before, while spending also picked up a little.
“There was little shift in consumer confidence since the Chancellor’s Budget, with many worried about the economy in the lead up to Christmas,” Helen Dickinson, chief executive of the BRC said.
“While there was a very slight improvement in people’s expectations of their personal financial situation, this was offset by declining expectations of the wider economy.”
“The last month clearly did little to shift the dial for households either positively or negatively,” she added.
The BRC’s survey adds to a body of evidence which suggests that the UK economy is in danger of stagnating following the government’s first Budget.
The UK was among the fastest growing economies in the G7 in the first half of the year, but quarterly growth dropped to just 0.1 per cent in the third quarter, with many pointing to the government’s gloomy rhetoric as a contributing factor.
Early indicators suggest that momentum is unlikely to pick up much in the final quarter. Retail sales figures, published last week, came in lower than anticipated, with sales volumes dropping 0.9 per cent in October.
S&P’s purchasing managers’ index (PMI), which measures business activity in the private sector, also fell to its lowest level in a year in November, while business confidence dropped to its lowest level since late 2022.