In a departure from the relatively positive consumer sentiment observed during the summer in the UK, a significant drop in confidence was recorded in the latest October report. The consumer confidence index for October saw a sharp decline of nine points, resulting in an already low score of -30. Adding to the concern, the Major Purchase Index, an important indicator for the approaching festive season, plummeted by 14 points, as reported by data firm GfK.
All five of the index’s readings for this month have shown a decline compared to the previous month’s figures. Joe Staton, the Client Strategy Director at GfK, highlighted that this notable decrease «underscores the impact of the ongoing cost-of-living crisis, with many consumers feeling the pressure of making ends meet.»
Further analysis of the index data reveals that the measure for Personal Financial Situation registered a six-point drop, settling at -19. Despite this, it represents an improvement of nine points when compared to October 2022. Forecasts for personal finances over the next 12 months also saw a decrease of six points to -8, still outperforming the figures from the same period last year by 26 points.
The measure for the general economic situation of the country during the last 12 months has decreased by seven points to -54, indicating an increase of 15 points compared to October 2022. Expectations for the general economic situation over the next 12 months experienced an eight-point decline to -32, reflecting an improvement of 29 points from the previous year.
The Savings Index also showed a two-point decrease, resulting in a score of +25, while remaining 12 points higher than the same period last year.
In conclusion, Staton emphasized that «the challenges associated with rising home heating costs, surging fuel expenses, managing increased mortgage and rental rates, a slowing job market, and uncertainties arising from the Middle East conflict have contributed to the growing unease. The fluctuation in consumer confidence is a clear indicator of the prevailing economic uncertainty, with no immediate signs of improvement.»
