Data: Consumers ‘slam on the brakes’ as confidence hit by rising living costs

Overall sentiment in GfK’s consumer confidence index fell by five points from -8 in August to -13 in September. All measures recorded by the index were down this month compared to August.

Consumers expressed concerns about their personal finances over the next 12 months with the index decreasing by six points, only three points higher than in September 2020. 

Expectations for the general economic situation across the UK dropped by 10 points this month, which is 22 points higher than in September 2020.

The major purchase index decreased by three points in September as consumers indicated that they did not feel now was the right time to make major investments due to growing fears around the economic situation for the coming year.

GfK client strategy director Joe Staton said: “On the back of concerns about rising prices for fuel and food, the growth in headline inflation, tax hikes, empty shelves and the end of the furlough scheme, September sees consumers slamming on the brakes as those already in economic hardship anticipate a potential cost of living crisis.

“All measures have declined this month and consumers are clearly worried about their personal financial situation and the wider economic prospects for the year ahead. The index also records a fall in the major purchase index – depressing news for hard-pressed retailers looking to build sales as they go into the key holiday period.

“When consumer confidence drops, shoppers tend to spend less and this dampens the overall economic prospects for the UK. This really is an unwelcome picture going into 2022 and beyond.”