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UK consumer mood sinks to new depths despite energy bills help

UK consumer mood sinks to new depths despite energy bills help 1

By Andy Bruce

LONDON (Reuters) – British consumer confidence slid this month to its lowest level since records began in the mid-1970s, with scant sign of any boost from Prime Minister Liz Truss’s announcement of additional support for households.

The consumer confidence index from market research firm GfK fell to -49 in September from -44 in August, worse than all forecasts in a Reuters poll that pointed to an improved reading of -42.

Readings of -30 and below have presaged recession on four out of five occasions since the survey started in 1974.

The survey straddled both Truss’s statement on capping household energy bills and the death of Queen Elizabeth on Sept. 8 but GfK recorded no significant change in responses after that date.

Overall, the readings underlined the precarious state of Britain’s economy hours before new finance minister Kwasi Kwarteng updates parliament on measures to help households and businesses.

Joe Staton, client strategy director at GfK, said rock-bottom readings for the survey’s forward-looking gauges were especially worrying. The survey follows much weaker-than-expected retail sales data for August.

“Consumers are buckling under the pressure of the UK’s growing cost-of-living crisis driven by rapidly rising food prices, domestic fuel bills and mortgage payments,” Staton said.

GfK’s gauges of economic and personal financial confidence each fell to their lowest level since comparable records from the European Commission began in 1985.

Staton said consumers will be anxious to hear what Kwarteng says on Friday.

“It will also be a major test for the popularity of Liz Truss’s new government.”

Truss announced on Sept. 8 that Britain will cap consumer energy bills for two years and funnel billions to prop up power companies.

 

(Reporting by Andy Bruce, editing by William James)

 

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