Breaking News: UK Consumer Confidence Drops to 6-Month Low Amid Economic Concerns | Market Update by Top Investment Manager
In a recent survey published on Friday, British consumers have shown increased pessimism following warnings by Prime Minister Keir Starmer regarding the economy and public finances. The GfK Consumer Confidence Index has plummeted to -20 in September, marking a significant decline from August's -13.
This seven-point drop is the largest since April 2022, and economists had anticipated a more moderate reading of -13. According to Neil Bellamy, Consumer Insights Director at GfK, households are reacting to Starmer's messages about an impending "painful" budget and early cost-cutting measures.
Finance Minister Rachel Reeves' decision to revoke a £200 annual fuel subsidy from 10 million pensioners, along with warnings of potential tax hikes, has left consumers anxious ahead of the Budget announcement on Oct. 30. All five measures of confidence have declined, particularly regarding the economy in the coming year.
Despite stable inflation and possible interest rate cuts, the outlook for the UK government remains uncertain. The Bank of England opted to maintain interest rates after a previous cut in August, with Governor Andrew Bailey expressing optimism about further rate reductions.
The GfK survey, conducted between Aug. 30 and Sept. 13, reflects the concerns of 2,003 respondents. As the public braces for potential financial challenges, it is crucial for individuals to stay informed and prepared for any economic changes that may impact their finances and livelihoods. Stay tuned for more updates and analysis from our expert team.