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HomeNews WireUK consumer confidence tumbles as inflation hits households

UK consumer confidence tumbles as inflation hits households

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UK consumer confidence has taken a hit as inflation begins to affect households across the country. The latest data from GfK shows that consumer optimism has dropped to a three-month low of -30 in October, down from September’s reading of -21.

Joe Staton, client strategy director at GfK, explains that confidence has fallen due to many households struggling to meet their financial obligations, such as mortgage payments and rents. He emphasizes that the cost-of-living crisis and the lack of sufficient money to make ends meet are putting immense pressure on consumers.

Staton also highlights that there is a growing unease among consumers, pointing to the increasing costs of heating homes, petrol prices, rising mortgage and rental rates, a slowing job market, and the uncertainties caused by conflicts in the Middle East.

Michael Hewson, chief market analyst at CMC Markets, comments on the impact of higher mortgage rates, rising fuel prices, and the events in the Middle East, stating that these factors have negatively affected sentiment.

The concern over inflation is not limited to consumer confidence but is also impacting market confidence. Investors fear that central banks will continue to raise interest rates, prolonging the squeeze on the economy. This fear was echoed by Jerome Powell, America’s top central banker, who stated that US inflation is still too high. However, Powell also hinted that the Federal Reserve might not raise interest rates in the coming month.

The latest retail sales figures, scheduled to be released at 7am, will provide further insights into consumer spending patterns. This data will be crucial in understanding the effects of inflation on consumer behavior.

With inflation failing to fall as anticipated and wages rising at a faster pace than prices after a two-year struggle, the challenges faced by UK households are becoming more apparent. As consumers grow increasingly concerned about their financial stability, it is essential for policymakers and businesses to address these issues and find solutions to ease the burden on households across the country.

More detail via The Guardian here… ( Image via The Guardian )

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