UK consumer confidence drops following new coronavirus restrictions
The British public became less optimistic about the economy in October as new restrictions were put in place, with consumer confidence falling for the first time in six months.
Pessimism about household finances and home values dragged down the overall confidence index produced by polling firm Yougov and economics consultancy the Centre for Economics and Business Research (Cebr).
The UK government brought in a new tiered system of restrictions earlier this month. Manchester, Lancashire, Liverpool and South Yorkshire are currently under the strictest “Tier 3” lockdown rules which have seen pubs and bars shut.
London is in Tier 2, meaning different households are banned from mixing indoors. Analysts have warned that the new restrictions, put in place in response to soaring Covid cases, will knock the UK’s economic recovery off course.
Financial worries weigh on consumer confidence
The new restrictions have also worried consumers, Yougov and Cebr’s poll showed. Their headline consumer confidence gauge fell to 101.3 in October, only just in positive territory.
It was down 1.1 points from September and was the first recorded drop since April. Nonetheless, any score above 100 means more consumers are confident than not.
The gauge for people’s future household finances fell sharply to from 91.6 in September to 86 in October. Respondents also became more gloomy about the direction of home values.
However, expectations for business activity and job security rose.
Additional research showed that only one in six people expect the economy to grow in the next year. More than 80 per cent said it will contract, Yougov said.
“Britons are becoming increasingly less certain about their own finances as we see further restrictions imposed across the country,” said Darren Yaxley, Director of Reputation Research at YouGov, said:
“As we enter the winter months, the picture will become clearer as to whether this was just a blip or the start of something more serious.”