UK consumer confidence sinks in November amid budget rumours

UK consumer confidence dropped in November amid rampant speculation about the upcoming government budget, data published by the British Retail Consortium showed on Thursday.

According to BRC-Opinium data, consumer expectations for the next three months for the state of the economy tumbled to minus 44 in November from minus 35 in October.

Expectations for consumers' personal financial situation worsened to negative 16 in November from negative 11.

Expectations for personal spending overall fell to positive 14 from positive 17, while expectations for personal spending on retail declined to positive 8 from positive 14.

Expectations for personal saving edged up to negative 5 from negative 9.

Helen Dickinson, chief executive of the British Retail Consortium, said: "It has been a tumultuous month of budget speculation and consumer confidence took a tumble. Strong hints by government earlier this month of income tax rises heightened public concern about their own finances and the wider economy, though government has since rowed back.

"With Christmas fast approaching, public expectations of spending – both on non-food retail goods and across wider spending – fell. Though expected spending on groceries did rise to its highest level since the survey began in 2024 as households prepare for Christmas during a period of high food price inflation."

Dickinson said UK Chancellor Rachel Reeves needs "a few rabbits from the budget hat" to help weak consumer and business confidence.

"Delivering on her promised business rates reforms and helping bring down the spiralling cost burden facing retailers will keep price rises in check and revive the fortunes of many struggling high streets. After decades of retail and hospitality paying the lion’s share of business rates, there is finally an opportunity to turn this broken tax into one that encourages local investment and supports local jobs," Dickinson said.

The sample of the survey was conducted between November 4 and 7 and included 2,000 UK adults, with the results having been weighted and assigned a net score.

On Wednesday, the Office for National Statistics said UK consumer price inflation cooled last month, to the tamest level since June.

The pace of annual consumer price inflation abated to 3.6% in October, from 3.8% in September. The reading landed in line with consensus cited by FXStreet and backs the Bank of England's notion that rate of inflation has peaked.

The reading for October snaps a three-month streak of the rate coming in at 3.8%. In June, it was at 3.6%. In October 2024, the pace of yearly consumer price growth was 2.3%.

On a monthly basis, consumer prices rose 0.4% in October of this year. In September, they had been flat from August.