British Consumer Confidence Declines

(Reuters) – British consumer confidence has fallen to its lowest level in over a year this January, marking significant decline from December.

According to a survey by market research firm GfK, the monthly consumer confidence index dropped to -22 in January from -17 in December, the lowest reading since December 2023. A Reuters poll had predicted a smaller decline to -18.

The GfK survey, not adjusted for seasonal variations, demonstrated a tendency to decline in January in previous years; however, this drop was larger than usual.

All components of the survey saw a decline, reflecting a series of negative economic signals since finance minister Rachel Reeves’ budget announcement on October 30, which involved raising taxes on businesses to facilitate investment and public service funding.

“These figures underline that consumers are losing confidence in the UK’s economic prospects,” remarked Neil Bellamy, consumer insights director at NIQ GfK. He also noted a significant increase in GfK’s savings index, indicative of a more cautious household outlook.

Recent official data shows that the growth of Britain’s economy has decelerated, but many economists believe that increased government expenditure from Reeves’ budget might stimulate growth, though likely only temporarily later this year.

Investors widely expect the Bank of England to cut interest rates on February 6.