Consumer confidence is on a downward trend as the Autumn Budget approaches.
- Data from BRC-Opinium indicates worsened consumer expectations for personal finances.
- The overall economic outlook has deteriorated, impacting consumer sentiment.
- Retail spending expectations remain stable despite broader economic concerns.
- Industry voices call for reforms to boost confidence and investment.
Consumer confidence is experiencing a noticeable decline ahead of the upcoming Autumn Budget. According to the latest data from the British Retail Consortium (BRC) Consumer Sentiment Monitor, expectations concerning personal financial situations have deteriorated significantly. Conducted between 10 and 13 September, the BRC-Opinium survey revealed that the index measuring consumer expectations for personal finances dropped to -6 in September, down from +1 in August. This indicates a growing pessimism among consumers regarding their immediate financial future.
The general economic perception has also become more negative. In September, the index reflecting the state of the economy plunged to -21, a stark decline from the -8 recorded in August. This shift suggests that consumers are increasingly uneasy about the broader economic environment. Despite this, there has been a slight improvement in retail spending expectations, with the index rising to -8 in September from -9 in the previous month. However, this marginal rise does not counterbalance the prevailing negative sentiment regarding the economic outlook.
Helen Dickinson, Chief Executive of the BRC, highlighted the challenges retailers might face due to this dip in consumer confidence. Dickinson noted, “Retailers could face a turbulent few months as consumer confidence fell significantly in September.” She attributed this trend to the negative publicity surrounding the UK’s economic state, pointing out that it particularly affects older generations. Despite the negativity, expectations for future retail spending have not shown a dramatic decline, as some consumers choose to reduce savings over spending.
Overall personal spending has decreased slightly, with the index falling to +10 in September from +11 the previous month. Additionally, personal saving has dropped sharply to -9 compared to -4 earlier, indicating fewer people are putting money aside. Dickinson argues that the Autumn Budget presents a crucial opportunity to rejuvenate economic confidence by encouraging spending and investment. She suggests reforms such as a 20% adjustment to retail property rates—termed the Retail Rates Corrector—could potentially stimulate investment in local communities, thus fostering job creation and enhancing consumer confidence.
The impending Autumn Budget is seen as a pivotal moment to restore consumer confidence and stimulate economic growth.
