UK consumer confidence slid to a four-month low in November, delivering a further setback to retailers ahead of the crucial Christmas shopping period.
GfK said its key index fell by two points to minus 12, matching the level seen in the month after the Brexit vote last year. All five measures used to calculate the score declined, with the willingness of consumers to make major purchases posting the biggest drop.
“Household jitters following the recent interest-rate hike, squeezed incomes, higher inflation and economic uncertainty have dampened the consumer mood across the UK,” said Joe Staton, head of market dynamics at GfK.
“Many retailers have been hit by the slowdown in consumer spending as households begin to feel the pinch and cut back on their budgets.”
Christmas Season
Figures from the Office for National Statistics this month showed retail sales barely rose in October and registered their first annual decline in more than four years, fuelling concerns about the health of the British consumer in the run-up to Christmas.
Chancellor of the Exchequer Philip Hammond offered some help for struggling households in the budget last week, but his room for giveaways was limited by the need to bring down the budget deficit.
GfK said the most worrying aspect of its latest survey was the plunge in the Major Purchase Index, which dropped by 6 points to minus 3.
A separate report by Lloyds showed business confidence dipped slightly in November after rising in the previous two months. While business prospects gained, economic optimism fell to the lowest since June 2016 - the month of the referendum to leave the European Union.
News by Bloomberg, edited by ESM. Click subscribe to sign up to ESM: The European Supermarket Magazine.
