British consumer confidence sank this month to its lowest level in over a year – making the steepest drop between December and January since 2011 – according to a survey that added to signs of slowdown in the economy.
The monthly consumer confidence index published by market research firm GfK fell in January to -22 from -17 in December – its lowest reading since December 2023.
A Reuters poll of economists had pointed to a smaller decline of -18.
The GfK survey is not adjusted for seasonal variations has shown a tendency in recent years to fall in January, but the latest drop was larger than usual.
All five of the survey’s components declined, echoing a run of downbeat economic signals since finance minister Rachel Reeves’ 30 October budget, which raised taxes on businesses to help increase funding for investment and public services.
Neil Bellamy, consumer insights director at NIQ GfK said, “These figures underline that consumers are losing confidence in the UK’s economic prospects.”
Bellamy pointed to a big rise in GfK’s savings index – which is not part of the overall consumer confidence index – as an example of the cautious mood among households.
Growth in Britain’s economy has slowed to a crawl, according to the latest official data, although many economists still think the higher government spending in Reeves’ budget will help to raise growth – albeit temporarily – later this year.
Investors widely expect the Bank of England to cut interest rates on 6 February.
Read More: UK Retail Sales Shrink Unexpectedly In December – ONS
