Consumer confidence is ‘bleak’ ahead of Budget
Consumer confidence has cratered ahead of the Budget according to a leading survey closely monitored by policymakers at the Treasury and Bank of England.
The GfK consumer confidence barometer has shown the overall index falling to -19 in November, slightly lower than at the same time a year ago.
The survey of around 2,000 individuals also showed people becoming less confident about their personal financial situations.
Brits were also less hopeful about their personal finances improving in the next year.
The reading for feelings about the general economic situation at present came in at -43 while the measure for expectations about the economy in the next 12 months also dropped in November.
In further bleak reading, people were also much less confident about personal savings as banks have continued to lower interest rates in recent months.
Feeling of dread
It represents businesses’ responses to five interest rate cuts made by the Bank of England over the last 12 months.
The survey underscores the feeling of dread ahead of the Budget, with people bracing for sweeping tax rises to hurt personal incomes.
In a measure of whether Brits were prepared to spend on big ticket items, confidence also fell by three points.
Neil Bellamy, consumer insights director at GfK, an NIQ Company, said the research firm’s latest publication was “bleak”.
“A fall across all five measures suggests the public is bracing for difficult news, with little in the current climate to lift expectations,” Bellamy said.
“The continued erosion of confidence is evident in the forward-looking measures for both personal financial situation and the general economic situation [scores], which are each down by two points.
“The three-point drop in the major purchase index is also troubling at this time of year, suggesting households are tightening their grip just as retailers move into a crucial trading period.”
GfK’s findings add to evidence that consumer confidence is faltering towards the end of the year.
A recent survey by S&P Global showed it dropping to a four-month low while business confidence surveys have been equally depressing.
Reeves has said she remains focused on boosting growth in the UK economy, with her Budget to target the cost of living and lowering borrowing costs.