MNI INTERVIEW: UK Consumers On Edge Ahead of November Budget

UK consumer sentiment fell in September, with the end of summer and prospects for higher taxes and reduced public spending spooking households, the head of a leading survey company told MNI. (See MNI INTERVIEW: UK Needs To Slash Spending Share Of GDP- Chadha)

With Chancellor of the Exchequer Rachel Reeves set to squeeze the national finances in her Nov 26 budget, consumers already appear to be hunkering down ahead of the announcement, Neil Bellamy, Consumer Insights Director at GfK, said in an interview.

"There’s an autumnal chill in the air this month, with all five measures of consumer confidence down and the Overall Index Score for September slipping two points," he said. 

The main index fell by two points to -19 in September, with all sub-components lower in comparison to last month.

"With tax rises expected in the November budget, the risk is that confidence inevitably falls, just like the autumn leaves," Bellamy said.

Speaking on the day the Bank of England left interest rates unchanged at 4%, he said even the rate cut in August had failed to offer any "obvious boost to the financial mood of consumers or drawn attention away from day-to-day cost issues." (see MNI BOE WATCH: Bank Holds Rates But Pares Scale Of Annual QT )

Both of GFK's personal finance measures -- past and future -- are lower, while the major purchases measure dropped three points to -16. 

Bellamy also highlighted the "striking" fall in consumer saving intentions, often seen as a marker of how stretched household budgets are, with the index sliding 8 points in September.

General Economic Situation
The measure for the general economic situation of the country during the last 12 months is down three points to -45; this is eight points worse than in September 2024.

Expectations for the general economic situation over the next 12 months have decreased two points to -32; this is five points worse than September 2024.

Major Purchase Index
The Major Purchase Index is down three points at -16; this is seven points better than this month last year.

Savings Index
The Savings Index has fallen eight points to +22 in September; this is one point lower than this time last year.