Consumer confidence drops for third month in a row

GfK’s long-running Consumer Confidence Index fell four points to minus 17 in October.

Confidence in personal finances for the next 12 months fell four points to one in the survey (PA) (PA Wire)

Consumer confidence has dropped for the third month in a row in a worrying turn for retailers in the build-up to Christmas.

GfK’s long-running Consumer Confidence Index fell four points to minus 17 in October against a backdrop of surging inflation and the likelihood of interest rate rises.

The sharpest concern is how consumers see the future economy, with this collapsing 10 points this month in a repeat of September’s figure.

Source: GfK

Confidence in personal finances for the next 12 months fell four points to one while the major purchase index – an indication of the confidence in spending on big ticket items – also fell four points to minus 10.

Joe Staton, client strategy director at GfK said: “After six months of robust recovery in the first half of 2021, UK consumer confidence has taken a turn for the worse with all vital signs weakening.

Source: GfK

“Against a backdrop of cheerless domestic news – fuel and food shortages, surging inflation squeezing household budgets, the likelihood of interest rate rises impacting the cost of borrowing, and climbing Covid rates – it is not surprising that consumers are feeling down-in-the mouth about the chilly winter months ahead.

“Worryingly for British retailing in the run-up to Christmas, there’s a further decline in the intention to make major purchases. The financial mood of the nation has changed and consumers could do with some strong tonic to lift their spirits.”