British consumers have grown more gloomy over the past month following the new Labour government’s removal of a welfare benefit for pensioners and warning of tax rises at next month’s budget, a new survey from a trade body showed on Thursday.
The British Retail Consortium said households’ assessment of the general economic situation over the next three months sank to -21 in September from -8 in August.
This reading – which represents the difference between the percentage of respondents with positive and negative views – is the lowest since the survey’s initial reading of -23 in March.
“Negative publicity surrounding the state of the UK’s finances appears to have damaged confidence in the economic outlook, particularly among older generations,” BRC Chief Executive Helen Dickinson said.
September is the first time that the BRC has published the results of its survey, which was based on a sample of 2,000 adults conducted by market research company Opinium between Sept. 10 and Sept. 13.
The results chime with those last week from the much longer-running GfK consumer survey, which fell to a six-month low this month due partly to concerns about the upcoming budget.
Prime Minister Keir Starmer and finance minister Rachel Reeves were elected in July, vowing to rebuild the economy after inheriting what they said were the worst economic circumstances since World War Two.
Reeves has said she will remove an annual 200-pound ($265) fuel subsidy from 10 million pensioners and warned taxes were likely to rise by more than she had said was planning to before Labour’s July election victory.
The BRC survey showed that households’ assessment of the outlook for their personal finances sank to -6 from -1, its lowest since the start of the survey, although spending intentions edged up marginally to -8 from -9.
Last week, S&P Global reported a softening in business activity, as some companies put plans on hold until there was more clarity on changes to taxation and employment law.
However, a separate survey released on Wednesday by the Recruitment and Employment Confederation showed employers’ sentiment over the third quarter of 2024 was slightly less negative than in the three months to June.
(Reporting by David Milliken)
