UK consumer confidence falls by 11 points — The Guardian

In the United Kingdom, the consumer confidence index fell by 11 points in October, to minus 24, amid rising living costs. This was the sharpest monthly decline in the indicator outside the COVID-19 pandemic period since July 2016, when the index fell following the result of the referendum on the country’s withdrawal from the EU, The Guardian reports.

Consumer sentiment deteriorated

The UK government and the Bank of England have tracked the GfK index as one of the early indicators of the state of the economy since the early 1970s. It recorded its biggest drop on record in March 2020, at the beginning of the first lockdown in Britain, when the indicator declined by 25 points.

Neil Bellamy, consumer insights director at GfK, linked the deterioration in sentiment to sustained cost-of-living pressure and international conflicts which, he said, contribute to domestic inflation. Official data showed that inflation in the country stood at 3.5% last month.

The index measuring willingness to make major purchases fell by 14 points in October, to minus 22. According to GfK, this may indicate that households are preparing to cut spending over the winter in order to account for higher energy bills in their budgets.

More current news is available on the UA.News Telegram channel Telegram.

Pressure ahead of the budget

British consumers have also faced petrol and diesel prices rising to nearly record levels, as well as higher energy bills ahead of winter. According to calculations by the Trades Union Congress, British households have spent nearly £14,000 extra on average over the past five years on mortgages, loans, energy and water supply.

Less than a week before Chancellor John Healey’s budget statement, the government is under pressure following warnings that annual energy bills for a typical household could reach £2,000 from January. Healey said he intended to present measures to ease pressure on households, but stressed the government’s limited ability to intervene.

Official data also showed that the public finance deficit stood at £24.5 billion, exceeding forecasts. Meanwhile, the Confederation of British Industry reported restrained investment intentions among manufacturing companies during the three months to October due to high costs.