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Consumer confidence has tumbled before the Budget against a backdrop of rising inflation and ongoing geopolitical tensions, figures show.
Expectations for the state of the economy over the next three months worsened to minus 40, down from minus 34 in September, according to an Opinium survey for the British Retail Consortium (BRC) taken between October 6 and October 9.
Consumer expectations for their personal finances also fell to minus 18 from minus 15.
However, expectations for personal spending on retail rose to 15 in October, up from five in September, as consumers began to think about Christmas.
BRC chief executive Helen Dickinson said: “Consumer confidence in the economy dropped for the third consecutive month against a backdrop of rising inflation and ongoing geopolitical tensions.
“Meanwhile, sentiment about personal finances fell to the second-lowest level on record, as confidence among Gen X and Boomers tumbled after the announcements around pensions.
“With the festive period now falling within the three-month window, there were significant rises in spending expectations, though concerns around inflation may also be contributing to this.”
Ms Dickinson added: “Households everywhere will be looking to the Chancellor to tackle the cost of living challenge at next week’s Budget.
“Retailers have been doing everything they can to limit price rises, but with the industry now paying 20% more in taxes than two years ago, there is no more room for manoeuvre.”
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Separate figures from S&P Global earlier this week found consumer confidence has slumped to its lowest point in more than three years amid inflation and rate hike fears.
The survey found October saw a sharp deterioration in confidence, with 57% of households expecting a shift to higher interest rates and spending and saving becoming increasingly constrained.
The survey, collected monthly since 2009 and based on a panel of 1,500 UK households, slid for a third straight month to 41.3 – the lowest since July 2023.
