Consumer confidence falls further in October

Shopper sentiment registered a one point decline year-on-year to -10, according to the GfK Consumer Confidence Index.

Three metrics declined during the month while two held steady.

Consumer’s outlook on their personal financial situation and the general economy of the next 12 months fell by one point each to +4 and -28 respectively, while shoppers’ inclination to make major purchases dropped two points to +4.

Consumer confidence in their personal finances and the wider economy over the last year both stayed the same at +1 and -28 respectively.

GfK’s client strategy director Joe Staton said: “The recent claims about the imminent end of austerity, and the good news of lower retail price inflation and accelerating wages growth would normally be sufficient to boost consumer sentiment.

“But the core Index slipped again this month. The prospect of a no-deal/hard-deal Brexit must surely be weighing heavily on people’s minds, injecting a mood of despondency as to how people view their future personal finances and the longer-term economic outlook for the UK. We also appear to be losing confidence that now is ‘the right time’ to make major purchases. This will concern retailers in the run-up to Black Friday, Cyber Monday and the key Christmas trading period.

“Consumers behave like financial markets – when confidence is lacking, markets stutter and tumble. When confidence comes back, we are more than willing to spend, borrow or save. However, with no immediate prospect of any feel-good news impacting our hearts, minds and wallets, the Index is set for further declines. It looks like the UK Government will need to administer an exceptionally strong tonic to the nation to settle the obvious Brexit anxieties.”