UK Confidence continues to sit at historic low during October

UK consumer confidence clawed back a meagre two points October as three measures increased while one was flat and one decreased.

According to the latest GfK Consumer Confidence Index, overall figures saw an increase by two points to -47 in October.

The Major Purchase Index, which includes big ticket items such as furniture, has fallen three points to -41; this is 31 points lower than this month last year.

The measure for the general economic situation of the country during the last 12 months is up three points at -69; this is 23 points lower than in October 2021. 

The index measuring changes in personal finances over the last 12 months was the same at -28; this is 23 points worse than October 2021.

The Savings Index is up two points this month at +13; this is nine points lower than this time last year.

Joe Staton, Client Strategy Director GfK, says: “UK consumer confidence continued to bump along close to last month’s historic low, with an Overall Index Score of -47 in October. However, all core measures remain severely depressed. The three-point fall in the major purchase measure continues a steep downward trend that began in July 2021 and is especially worrying for the final quarter of the year, which many businesses rely on to strengthen their balance sheets.

“But the biggest danger by far is inflation, now rising at its fastest rate for 40 years. Households are not just running scared of burgeoning energy and food prices, and the prospect of further base rate rises increasing mortgage costs. They are now facing the likelihood of tax rises and even austerity measures.

“For ordinary consumers, this web of uncertainty and turmoil amounts to a ‘new abnormal’. The negative environment will deflate future spending plans, and cautious consumers could easily slow the UK economy still further. Consumers, like governments, are just as capable of U-turns, and today’s economic headwinds indicate a long hard winter.”

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