Consumer confidence “stumbled” in September, as shoppers brace themselves for energy and living costs to rise in autumn.
Expectations in the state of the economy over the next three months worsened in September, falling from –28 to –34, according to the latest BRC-Opinium data.
Escalations in the Middle East conflict over the past month has pushed the price of fuel to above 190 pence per litre this week. Trade bodies and governments have also warned about the impact of rising food inflation.
As a result, consumers felt less confidence about their own financial situation, with outlook worsening to –15, down from –9 in August. Many are planning to cut back as a result, with outlook for personal spending on retail falling from +8 to +5. Outlook on personal spending remained the same at +15.
“Consumer confidence in the economy stumbled after four months of improvement, with a similar trend for sentiment around personal finances,” said BRC chief executive Helen Dickinson.
“This decline was much sharper among women and with households bracing for a sharp rise in energy costs this winter, and bills rising faster than shop prices, it is little surprise that expectations of retail spending fell, even as overall spending plateaued.”
Overall, 48% of shoppers said they expected the economy to get worse, with 33% believing it will stay the same.
Chancellor John Healey is set to deliver his maiden budget on 28 October, and Dickinson called for more measures to improve consumer confidence.
“With the budget looming large, consumers want to see government prioritise bringing down the cost of living,” Dickinson said.
“Retail will play its part, but the Chancellor must not compound the triple blow from escalating employment costs, energy bills, and business rates, allowing retailers to focus on holding prices down. He should start by freezing the business rates multiplier, preventing yet another burdensome tax increase.”
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