A long-running measure of UK consumer confidence has dropped significantly as warnings about a “painful” upcoming Budget shake people’s economic outlook. GfK’s Consumer Confidence Barometer saw a steep decline since late August, as concerns about potential tax rises and spending cuts in the 30 October Budget loom large.
Labour leader Sir Keir Starmer warned that the Budget will be “painful,” with plans like means-testing winter fuel payments, affecting over nine million pensioners. This rhetoric has been linked to the fall in confidence, according to GfK and some business leaders. Nick Glynne, CEO of Buy It Direct Group, noted a 9% drop in traffic, correlating with the government’s bleak forecasts.
Despite an interest rate cut in August and falling inflation, consumers remain wary about future financial stability, as further tax increases and welfare cuts are expected. Chancellor Rachel Reeves has promised to address public finances while working to “rebuild Britain.”