UK consumer confidence sinks to lowest for over a year: GfK
UK HOUSEHOLD confidence tumbled to the lowest since before Labour returned to power as the fallout from Chancellor Rachel Reeves’ budget continued into the new year.
GfK said its key sentiment gauge slipped five points to minus 22 in January, the weakest confidence has been since the end of 2023.
The findings bode ill for an economy that has slowed sharply since Labour won a landslide victory in last July’s election. Consumers are crucial to the outlook because their spending makes up around two-thirds of GDP.
Households were spared much of the direct pain from £40 billion (S$67 billion) of tax rises in the budget. However, businesses have warned they may be forced to slash jobs after being hit with a hefty increase to payroll taxes and a jump in the minimum wage.
A sub-index showing consumer expectations for the economy over the next 12 months slumped eight points to minus 34, the worst in almost two years. Households also declared themselves more pessimistic about their financial prospects, with fewer prepared to splash out on big-ticket items and more saving as a precaution.
“New Year is traditionally a time for change, but looking at these figures, consumers do not think things are changing for the better,” said Neil Bellamy, consumer insights director at GfK. A nine-point jump in its savings index is “another sign that people see dark days ahead and are therefore thinking of putting money aside for safety”.
The report chimes chime with a survey from the British Retail Consortium on Thursday (Jan 23) that found almost half of Britons expect the economy to get worse in the next three months. BLOOMBERG
Share with us your feedback on BT's products and services
