Consumer confidence falls 11 points in October as households turn gloomier about money
The long-running GfK survey dropped to minus 24 this month. Outside the pandemic, the last time it fell this far in one go was straight after the 2016 EU referendum.
British shoppers have become a lot less cheerful about their finances this autumn. GfK's monthly consumer confidence index fell by 11 points in October to minus 24, down from minus 13 in September, according to figures published on Friday.
GfK said a monthly drop that size had happened only twice before outside the Covid lockdown period. The last one was in July 2016, after the vote to leave the European Union. The biggest single fall in the survey's history came in March 2020, when the index lost 25 points as the first lockdown began.
What people told the survey
The overall score is built from five questions about personal finances, the wider economy and big spending plans. All five went down this month.
- Personal finances over the past year: down 7 points to minus 10.
- Personal finances over the next year: down 8 points to minus 3, so slightly more people now expect to be worse off than better off.
- The economy over the past year: down 12 points to minus 48.
- The economy over the next year: down 14 points to minus 36.
- Plans for major purchases: down 14 points to minus 22, a sign that people are less ready to spend on things like sofas, kitchens and electrical goods.
The only figure to rise was the savings index, which is not part of the headline score. It went up a point to plus 28, suggesting more households want to put money aside rather than spend it.
GfK linked the slide to rising living costs and to international conflicts that are feeding into prices at home. Official figures this week showed inflation climbed to 3.5% in September, and fuel prices have risen sharply in recent months. GfK also pointed out that confidence had picked up over the summer, helped by England's World Cup run, warm weather and the arrival of a new Prime Minister, and that October's reading has wiped out that gain.
Why it matters for the Budget
The figures arrive days before the Chancellor, John Healey, delivers his first Budget on Wednesday 28 October. Ministers, the Bank of England and retailers all watch the survey because it has been running since the 1970s and often gives an early hint of how people will spend in the months ahead.
The fall in the major purchase measure comes as shops head into the Christmas trading season. Official figures published on the same day showed retail sales volumes fell 0.4% in September.
The survey was carried out between 1 and 14 October among 2,003 people aged 16 and over across the UK. Because GfK publishes the survey every month, the November reading will be the first to show how households feel after the Budget.
