As the Autumn Budget approaches, consumer confidence declines, raising concerns for retailers and the broader economy.
- Consumer expectations for personal financial situations have worsened, dropping significantly in September compared to the previous month.
- Economic sentiment has also deteriorated, leading to increased anxiety among various demographics, particularly older generations.
- Despite negative economic projections, personal spending on retail has shown a small improvement, albeit within a negative context.
- The upcoming Budget presents an opportunity to revitalize confidence, focusing on retail rates and potential investment in local communities.
The latest data from the British Retail Consortium (BRC) Consumer Sentiment Monitor indicates a marked decline in consumer confidence ahead of the anticipated Autumn Budget. Results from the BRC-Opinium survey, conducted from September 10 to 13, reflect a significant downturn in consumer expectations regarding their personal financial outlook over the next quarter. Specifically, the index fell to -6 in September from +1 in August, illustrating growing concerns about financial stability.
The report further highlights a decline in general economic sentiment, with figures dipping to -21 in September from -8 in August, amplifying the sense of unease within the economy. This declining trend in consumer sentiment is particularly pronounced among older demographics, who are increasingly wary of the UK’s economic prospects.
Conversely, the data presents a nuanced view of consumer behavior in the retail sector. Personal spending on retail showed a slight improvement, rising to -8 in September from -9 in August. However, this marginal increase exists within the broader context of declining consumer confidence and strained financial conditions.
Overall personal spending contracted, shifting to +10 in September from +11 in August, whereas personal savings also decreased to -9 from -4 the previous month. These changes signify a reallocation of financial priorities amongst consumers, indicating a reduction in savings to maintain spending levels.
Helen Dickinson, the chief executive of the BRC, voiced concern over these trends, stating, “Retailers could face a turbulent few months as consumer confidence fell significantly in September. Negative publicity surrounding the state of the UK’s finances appears to have damaged confidence in the economic outlook, particularly among older generations.” She emphasized the potential of the upcoming Budget to restore confidence through strategic adjustments, notably by revisiting the current retail rates structure.
The proposal of a ‘Retail Rates Corrector,’ suggesting a 20% adjustment to retail property rates bills, is seen as a critical move to boost investment in local high streets and foster job creation, thereby enhancing consumer confidence. This strategic focus on stimulating investment is expected to invigorate consumer sentiment and support economic recovery.
The Autumn Budget is positioned as a crucial moment to address declining consumer confidence and stimulate economic revitalization through targeted fiscal policies.
