Consumer confidence slips in October

shops vanish

Consumer confidence in the UK dipped by one point in October, as anxiety over the economy took its toll.

Data from GfK’s long-running Consumer Confidence Index indicates that the overall index score fell from -9 in September to -10 in October.

Despite the slip, consumer confidence has generally plateaued since June, when it plummeted to -10 compared to May’s overall index score of -5.

The index for October is also not as bad as the -12 that was recorded in July.

“It’s no surprise that the overall index score continues to bump along in negative territory this month,” GfK head of market dynamics Joe Staton said.

“As concerns about the wider economic prospects for the UK economy dampen our outlook, consumers are showing no real ‘get-up-and-go’.”

Despite the major purchase index — which measures consumers’ desire to spend on big-ticket items — increasing two points in October to +3, it is still down 11 points year-on-year.

In addition, consumers’ optimism around their personal finances in the past 12 months edged up one point month-on-month to +1, while sentiment about personal finances for 12 months ahead remained the same as September’s +4.

Also in October, confidence in the UK’s economic situation for the next 12 months dropped two points month-on-month to -26.

However, this is a nine-point plunge compared to the -17 score recorded in October last year.

Meanwhile, confidence in the UK economy over the last 12 months was down one point compared to September and 10 points compared to October 2016.

“The tiny shift up a point in how we view our personal finances over the past year is counter-intuitive given rising living costs, an imminent interest rate rise, and the reality that we earn less in real terms in 2017 than in early 2006,” Staton said.

“Our enthusiasm for spending, as witnessed by the uptick in the major purchase index, is more worrying than reassuring.

“Surging credit card use is fueling spending at the expense of our appetite for saving, which is growing at the slowest rate since the start of the 2008/2009 financial crisis.

“We are now entering the crucial Christmas trading season and it will be a testing time for retailers and consumers alike.

“Will consumers carry-on shopping or start to cut-back in the face of mounting pressure on our pockets?”

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