UK consumer confidence suffered a big fall in September, down seven points compared with the same time last year.
According to GfK (GFKRF)’s consumer confidence barometer, all measures were down in comparison with last month’s announcement. Key future indicators on personal finances, economy and purchase intentions all came in sharply lower.
The index measuring changes in personal finances during the last year was down two points at -9, which was nine points better than September 2023. Meanwhile, the forecast for personal finances over the next 12 months is down nine points at -3, which is three points higher than this time last year.
The measure for the general economic situation of the country during the last year is also down two points at -37. This is 16 points higher than in September 2023.
Expectations for the general economic situation over the next 12 months are down 12 points at -27; this was two points better than September 2023.
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GfK revealed that the Major Purchase Index was down 10 points to -23; five points higher than this month last year. Lastly, the Savings Index decreased 10 points to +23; the same as this time last year.
This month’s survey was conducted among a sample of 2003 individuals between 30 August and 13 September.
The news comes after British prime minister Keir Starmer warned that the upcoming autumn budget would be “painful.” It was an indication that the Labour government could raise taxes.
Neil Bellamy, consumer insights director at GfK, said: “Headline consumer confidence has recorded a big fall this month to -20, taking us back to a similar level seen at the beginning of this year. All five measures are down but there are major corrections in the outlook for our personal financial situation for the next 12 months (down nine points), our views on the general economy for the coming year (down 12 points), and the major purchase index (down ten points).
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“These three measures are key forward-looking indicators so, 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 30th October.”
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