Consumer confidence “tumbled” in October as shoppers brace themselves for next week’s autumn budget.
Consumer confidence in the state of the economy dropped for the third consecutive month in October. Expectations for the next three months have worsened to -40, down from -34 in September, according to the latest BRC-Opinium data.
Sentiment about personal finances fell to the second-lowest level on record, from -15 in September to -18 in October. British Retail Consortium CEO Helen Dickinson said the figure tumbled after recent pension announcements, with prime minister Andy Burnham having recently outlined plans to ditch the existing triple lock for the state pension.
However, consumer expectations of their personal spending on retail rose from +5 in September to +15 in October, while their personal spending overall rose from +15 to +23.
Consumer spending expectations over the next three months on groceries also increased to +36 from +28 in September.
“With the festive period now falling within the three-month window, there were significant rises in spending expectations, though concerns around inflation may also be contributing to this,” Dickinson said.
With Chancellor John Healey set to deliver his first budget on 28 October, Dickinson said the government “must act on the tsunami of costs that have hit the industry, from employer National Insurance Contributions to business rates”.
“Households everywhere will be looking to the Chancellor to tackle the cost of living challenge at next week’s budget. Retailers have been doing everything they can to limit price rises, but with the industry now paying 20% more in taxes than two years ago, there is no more room for manoeuvre.
“A little breathing room for retailers at the budget can mean a lot of breathing room for households,” she added.
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