UK consumer confidence worsens despite spending rise

Consumer sentiment in the UK has deteriorated in July, with households growing more pessimistic about the economy and their personal finances, according to the latest BRC-Opinium Consumer Sentiment Index.

Expectations for the state of the economy over the next three months worsened to -33, down from -28 in June, signalling growing anxiety amid persistent cost pressures. Consumers’ views on their personal financial situation also weakened, falling to -7 from -5 last month, BRC said in a release.

However, indicators of personal spending showed a modest uptick. Expectations for retail spending edged up to +3 (from +2), while overall personal spending rose more notably to +16, up from +12 in June. Meanwhile, intentions to save remained in negative territory but improved marginally, ticking up to -3 from -4.

“With the UK economy shrinking for the second consecutive month, it is little surprise that consumer confidence fell in July. Despite fierce competition between retailers, retail inflation has risen steadily over the last nine months as a result of the chancellor’s last Budget, which significantly increased employment costs. Further tax rises hitting the retail industry at the next Budget would likely fan the flames of inflation as retailers are forced to increase prices. The chancellor has the opportunity to support households and high streets: the proposed business rates reforms could make the system fairer, provided government ensures that no store pays more as a result,” said Helen Dickinson, chief executive of the British Retail Consortium.

ALCHEMPro News Desk (HU)