UK consumer confidence tumbles - GfK

19th Sep 2024 09:43

(Sharecast News) - UK consumer confidence fell sharply in September, a long-running survey showed on Friday, despite the more stable economic backdrop, as people nervously wait on next month's Budget.

The latest GfK Consumer Confidence Index came in at -20, a seven-point slide on August's reading.

All sub-measures fell. The index for expectations for personal finances in the coming 12 months fell nine points to -3, while the measure of predictions for the economic situation tumbled 12 points to -27.

The major purchase index lost 10 points to -23, while the savings index also fell 10 points, to 23.

Prior to September's survey, consumer confidence had been improving, boosted by inflation returning to near target, a cut in interest rates earlier in the summer and a new government.

However, economic growth appears to have stalled. Recent data showed GDP stagnated for the second consecutive month in July, disappointing analysts who had been expecting in a 0.2% uplift.

The new government is also due to announce its first Budget next month, and has already warned of a £22bn black hole in the public finances.

Neil Bellamy, consumer insights director at GfK, said: "Despite stable inflation and the prospect of further cuts in the base interest rate, this is not encouraging news for the UK's new government.

"Strong consumer confidence matters because it underpins economic growth and is a significant driver of shoppers' willingness to spend.

"Following the withdrawal of the winter fuel payments, and clear warnings of further difficult decisions to come on tax, spending and welfare, consumers are nervously awaiting the Budget decisions on 30 October."

The survey was conducted among a sample of 2003 individuals aged 16+ between 30 August and 13 September.