(Reuters) – British consumer confidence sank this month to its lowest level in over a year, marking the steepest drop between the months of December and January since 2011, according to a survey that added to signs of a 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 smaller decline to -18.
The GfK survey is not adjusted for seasonal variations and 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’ Oct. 30 budget, which raised taxes on businesses to help increase funding for investment and public services.
“These figures underline that consumers are losing confidence in the UK’s economic prospects,” said Neil Bellamy, consumer insights director at NIQ GfK.
He 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 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.
The Bank of England is widely expected by investors to cut interest rates on Feb. 6.
