UK consumer confidence hit by economic turmoil - GfK
Consumer sentiment has dropped sharply amid economic turmoil including fuel shortages and rising prices, a survey showed.
The total measure of GfK's consumer confidence barometer dropped to -17 in October, as expected by most economists, from -13 a month earlier in the third month of decline.
All five aspects of the survey fell, led by respondents' view of the economy over the next 12 months, which dropped 10 points to -26 from September and 20 points from August. Households were also less optimistic about their personal finances over the next year and less likely to make a major purchase.
The survey showed consumers' mood darkening after recovering from the depths of the pandemic in the first half of 2021. The UK has been hit by fuel shortages, goods missing from grocers' shelves and price rises squeezing the cost of living. A rising tide of Covid-19 cases also threatens to make the coming winter a tough one.
Joe Staton, GfK's client strategy director, said: "UK consumer confidence has taken a turn for the worse with all vital signs weakening. For two consecutive months five sub-measures have decreased and the headline score has dropped three months in a row. The sharpest concern is how consumers see the future economy.
"Against a backdrop of cheerless domestic news it is not surprising that consumers are feeling down-in-the mouth about the chilly winter months ahead. Worryingly for British retailing in the run-up to Christmas, there’s a further decline in the intention to make major purchases."
Chancellor Rishi Sunak faces a choice at his upcoming budget between cutting spending in a bid to stem the deficit and maintaining support for the economy. Reports say he favours cuts but many economists have warned that this action would be counterproductive because it would hit growth.
GfK surveyed 2,000 people between 1 October and 13 October.