Consumer confidence has sharply declined amid growing concerns that Labour’s rhetoric is fuelling economic fears, raising the possibility of a downturn in Britain.
GfK’s latest consumer confidence index dropped by seven points to -20 in September, with households increasingly anxious about their personal finances and the overall economic outlook. The survey also showed a 12-point drop in expectations for the economy over the next year, with the reading plunging to -27.
Neil Bellamy of GfK attributed the fall in confidence to “the withdrawal of winter fuel payments and warnings of tough decisions ahead on tax, spending, and welfare.” Business confidence has similarly faltered, with both the Institute of Directors and the Confederation of British Industry reporting growing concerns over potential tax hikes in October’s Budget.
The fear of increased taxes has led many businesses to delay investment and hiring decisions, heightening worries that the government’s approach could push the economy into recession.
City leaders and economists have called on Chancellor Rachel Reeves to offer a more positive outlook. Sir Philip Hampton, former chairman of Royal Bank of Scotland and Sainsbury’s, warned that pessimistic political messaging risks stifling the “animal spirits” needed for economic growth. “Political leadership should remind people that innovation and change are possible, even with financial constraints,” he told The Telegraph.
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