UK consumer confidence falls to three-year low amid rising rate expectations

In October, the S&P Global confidence index for UK households slipped to 41.3, marking the third month of decline and the lowest reading since July 2023. The drop reflects growing worries about inflation and the likelihood of additional Bank of England interest-rate increases, which have eroded expectations for personal finances over the coming year. Survey respondents across all income levels reported that their financial wellbeing is set to worsen, a pattern seen only once before in the past three years, alongside April.

Both private-sector and public-sector employees said their current financial situation has deteriorated, with public-sector workers feeling the impact more strongly. The index measuring willingness to make major purchases also fell to one of its lowest points in over three years, underscoring consumer hesitancy. Additionally, October marked the fifth straight month of pessimism about the labour market among UK households. Economists warn that the slump presents a challenging backdrop for the upcoming Budget.