LONDON (Reuters) – Confidence among British consumers remained close to the lowest level on record this month with households facing double-digit inflation, rising interest rates and political chaos, survey showed on Friday.
Market research firm GfK’s consumer confidence index rose to -47 from -49 in September which was its weakest level since the survey was launched in 1974. Economists polled by Reuters had expected a worse reading of -52.
The survey of 2,001 people was conducted between Oct. 3 and Oct. 13, covering the period after Prime Minister Liz Truss agreed to a first of several U-turns on tax policy – reversing her decision to axe the top rate of income tax – but before her resignation on Thursday.
New finance minister Jeremy Hunt has said he will drop most of Truss’s economic programme, cut public spending and has warned of further difficult decisions on tax as he tries to restore Britain’s economic policymaking credibility.
“Households are not just running scared of burgeoning energy and food prices, and the prospect of further base rate rises increasing mortgage costs. They are now facing the likelihood of tax rises and even austerity measures,” Joe Staton, client strategy director at GfK, said.
A three-point fall in a measure of consumers’ willingness to make expensive purchases showed how their caution could slow the British economy which already looks set to go into a recession.
“Consumers, like governments, are just as capable of U-turns, and today’s economic headwinds indicate a long hard winter,” Staton said.
(Writing by William Schomberg, editing by Andy Bruce)