The latest poll of UK consumer confidence has shown a sharp decline this month, with optimism over personal finances, purchase intentions, and the state of the economy all lower than in August. The drop is attributed to fears of a ‘painful budget’ next month, which is expected to include tax cuts to fix public finances. Neil Bellamy, consumer insights director at GfK, highlights that key forward-looking indicators have dropped notably, despite stable inflation and the prospect of further interest rate cuts. Strong consumer confidence is crucial for economic growth and driving consumer spending. The upcoming budget statement on 30 October by Rachel Reeves is anxiously anticipated by consumers, following the unpopular decision to means-test winter fuel payments for pensioners and warnings of difficult decisions on tax, spending, and welfare. The drop in consumer confidence comes despite Labour’s promise not to raise taxes on working people. Retail sales in August have shown an increase, despite the consumer confidence slump, with a rise in the volume of goods bought thanks to warmer weather and end-of-season sales. Veteran retailer Justin King attributes the drop in confidence to budget fears, while Conservative MP Robert Jenrick blames the government for creating uncertainty among investors. Overall, the decline in consumer confidence ahead of the budget reflects concerns about the economy and future financial decisions.
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