Consumer confidence in the U.K. experienced a decline in October, primarily driven by soaring living costs that deterred consumers from making significant purchases in preparation for the upcoming Christmas season, according to a recent survey.
The consumer confidence index, compiled by consumer-research firm GfK, witnessed a nine-point drop to reach minus 30 this month. This reading puts the index back to its July levels following a surge in September, where it peaked at minus 21, the highest point since January 2022.
Joe Staton, client-strategy director at GfK, highlighted the various challenges contributing to this downward trend in confidence. These include the soaring costs of heating homes, increasing petrol prices, surging mortgage and rental rates, a sluggish job market, and the uncertainties arising from conflicts in the Middle East.
All components of the index experienced decreases in October. Of particular concern is the 14-point decline in the measure for major purchases, which could impact retailers significantly during the Christmas shopping period.
Furthermore, concerns about the U.K. economy led to an eight-point drop in the measure for the economic situation over the next 12 months, reaching minus 32. Additionally, the measure for personal finances over the same period sank from minus 2 to minus 8.
Staton emphasized that the volatility seen in consumer confidence indicates a prevailing sense of economic pessimism, with no immediate signs of improvement on the horizon.
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