UK consumer confidence has taken a drastic fall in September

The overall index score for consumer confidence decreased by seven points to -20 in September, according to the latest GfK Consumer Confidence Barometer.

The drastic fall takes the index back to a level seen at the beginning of this year. All indexes measuring consumer confidence were down compared with last month.

The index measuring consumers’ confidence in their personal financial situation over the past 12 months was down by two points to -9.

When looking ahead to the next 12 months, the personal financial situation index decreased by nine points to -3, which was three points higher than this time last year.

Consumer confidence in the general economic situation over the past 12 months was down by two points to -37 and fell 12 points to -27 when looking at the next 12 months.

The major purchase index was down by 10 points to -23, while the savings index over the next 12 months fell 10 points to 23, remaining the same as this time last year. 

Neil Bellamy, consumer insights director at GfK, said: “Headline consumer confidence has recorded a big fall this month to -20, taking us back to a similar level seen at the beginning of this year.

“All five measures are down but there are major corrections in the outlook for our personal financial situation for the next 12 months (down nine points), our views on the general economy for the coming year (down 12 points) and the major purchase index (down 10 points).

“These three measures are key forward-looking indicators so, despite stable inflation and the prospect of further cuts in the base interest rate, this is not encouraging news for the UK’s new government.

“Strong consumer confidence matters because it underpins economic growth and is a significant driver of shoppers’ willingness to spend.

“Following the withdrawal of the winter fuel payments and clear warnings of further difficult decisions to come on tax, spending and welfare, consumers are nervously awaiting the Budget decisions on October 30.”