UK consumer confidence has dipped again in October, reflecting increasing concerns about the upcoming autumn budget, according to a GfK survey. The consumer confidence index fell by 1 point, to -21 points, as expectations for the economy over the next year worsened. Despite slight optimism in personal finances, overall sentiment remains low.
The October decline was less severe than September’s seven-point drop, which experts linked to Labour’s cautious messaging on spending plans. Chancellor Rachel Reeves has consistently warned of "tough choices" due to what she described as challenging conditions inherited from the previous Conservative government.
Neil Bellamy, GfK’s consumer insights director, described a "despondent mood" among consumers, despite a recent drop in inflation. He noted that consumers are anxiously awaiting the October 30 budget announcement.
Inflation fell to a three-year low earlier in October, prompting expectations that the Bank of England will cut interest rates in November. Lower rates could potentially ease mortgage costs for homebuyers, but this did not boost overall confidence in the economy. GfK's index of economic expectations for the next year fell by 1 point, to -28 points, while personal financial outlooks improved slightly - by 1 point, to -2 points.
Linda Ellett, UK head of consumer, retail and leisure for KPMG, cited household costs, job security, and economic perceptions as key factors affecting confidence. KPMG’s research showed those aged 65 and over are particularly worried, due to rising energy prices and potential pension-related measures in the budget.