UK consumer confidence has plunged at its fastest rate since the Covid pandemic.
The latest GfK Consumer Confidence Barometer revealed an 11-point drop in October to -24, down from -13 in September, marking the sharpest monthly decline since the early months of the pandemic.
Excluding Covid, the last fall of this magnitude was recorded in July 2016, following the Brexit referendum.
The decline comes as households face mounting pressure from soaring energy and fuel costs, with inflation reaching 3.5 per cent amid the ongoing conflict in the Middle East.
Consumers’ willingness to make major purchases fell sharply, with GfK’s major purchase index dropping 14 points to -22, its lowest level in more than two years.
Expectations for the wider economy over the next 12 months also deteriorated, falling 14 points to -36, raising concerns over shoppers’ appetite for discretionary spending during the Golden Quarter.
GfK consumer insights director Neil Bellamy described the findings as an “extraordinary collapse in consumer confidence”.
He warned that the deterioration was particularly concerning given the government’s focus on economic growth, with confidence weakening across all income, age and gender groups.
The findings come just days before Chancellor John Healey delivers his first Budget on 28 October, amid growing pressure to introduce measures that ease the cost-of-living squeeze.
The government has pledged to provide households and businesses with some breathing space, although rising borrowing costs have limited its room for manoeuvre.
The latest figures add to concerns among retailers about consumer spending in the months ahead.
Separate data from the British Retail Consortium revealed that retail sales growth slowed to 1.3 per cent in September, compared with 2.3 per cent a year earlier, as shoppers remained cautious about their spending.
BRC chief executive Helen Dickinson has warned that further increases in business costs, including business rates, could put additional pressure on prices and undermine investment across the sector.
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