UK consumer sentiment worsens in October ahead of government budget

(Alliance News) - UK consumer sentiment continued to deteriorate in October, according to a survey, with confidence among Gen X and Boomers falling in particular amid pension concerns, ahead of the UK government budget due next week Wednesday.

Data from the British Retail Consortium-Opinium consumer sentiment monitor, published on Thursday, showed that expectations for the state of the UK economy over the next three months fell to minus 40 index points in October from minus 34 points in September.

Expectations for personal finances deteriorated to minus 18 points in October from minus 15 in September.

Expectations for overall spending rose to plus 23 points in October from plus 15 in September. Expectations for personal spending on retail climbed to plus 15 points in October from plus 5 in September.

Consumer expectations for personal savings fell to minus 9 points in October from minus 7 in September.

Notably, confidence among Gen X and Boomers tumbled. In late September, UK government ministers refused to confirm that Labour's commitment to the pension triple lock – which guarantees that pensions will rise in line with inflation, 2.5% or average earnings, whichever is the largest increase – will be in the party's 2029 general election manifesto.

Helen Dickinson, chief executive of the British Retail Consortium, said: "Consumer confidence in the economy dropped for the third consecutive month against a backdrop of rising inflation and ongoing geopolitical tensions. Meanwhile, sentiment about personal finances fell to the second-lowest level on record, as confidence among Gen X and Boomers tumbled after the announcements around pensions. 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.

"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. Government must act on the tsunami of costs that have hit the industry, from employer national insurance contributions to business rates. A little breathing room for retailers at the budget can mean a lot of breathing room for households."

The survey was conducted between October 6 and 9 among 2,000 UK adults.

By Tom Budszus, Alliance News slot editor

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