LONDON(Reuters) – British consumer confidence has tumbled this month after rising to its highest since the start of 2022 in September, reflecting households’ renewed concerns about the outlook for their personal finances and the broader economy.
The GfK consumer confidence index, Britain’s longest-running survey of its type, dropped to a three-month low of -30 in October from September’s reading of -21.
Economists polled by Reuters had forecast a modest improvement to -20, and the nine-point drop was the largest since a one-off survey GfK did at the start of the COVID-19 pandemic in 2020.
The last time the survey showed a bigger drop in a regular monthly release was in December 1994.
“This sharp fall underlines that the cost-of-living crisis, and simply not having enough money to make-ends-meet, are still exerting acute pressure for many consumers,” Joe Staton, client strategy director at GfK, said.
British consumer price inflation held at 6.7% in September – the highest rate across major advanced economies – although it is down from the 41-year high of 11.1% recorded in October 2022.
Most economists expect inflation to fall sharply this month due to less unfavourable year-on-year comparisons for energy prices, but the average cost-of-living is still around 17% higher than it was two years ago.
“The fierce headwinds of meeting the accelerating costs of heating our homes, filling our petrol tanks, coping with surging mortgage and rental rates, a slowing jobs market and now the uncertainties posed by conflict in the Middle East, are all contributing to this growing unease,” Staton said.
Households’ willingness to make major purchases recorded an especially sharp monthly fall, which GfK said would worry retailers in the run-up to Christmas, although the level of the index remained above where it was in October 2022.
The poll of 2,000 individuals aged 16 and over took place from Oct. 2 and Oct. 13.
(Reporting by David Milliken)