British Consumer Confidence Sinks to Over a Year Low in January
LONDON – British consumer confidence fell to its lowest level in over a year, according to a survey by market research firm GfK. The monthly consumer confidence index dropped to -22 in January, down from -17 in December, marking the steepest slide from December to January since 2011. The decline was larger than expected, surpassing a Reuters poll of economists, which predicted a smaller decline to -18.
All five components of the survey, which is not adjusted for seasonal variations, declined, echoing a run of downbeat economic signals since the UK’s finance minister, Rachel Reeves, presented a budget in October that raised taxes on businesses to increase funding for investment and public services.
The survey’s consumer insights director, Neil Bellamy, noted that the results indicate consumers are losing confidence in the UK’s economic prospects, pointing to a significant rise in the savings index, which is not part of the overall consumer confidence index, as an example of the cautious mood among households.
Growth in the British economy has slowed to a crawl, with many economists predicting the higher government spending in the budget will lead to temporary growth later this year. The Bank of England is widely expected to cut interest rates on February 6, which could help stabilize the economy.