Consumer confidence slumps to lowest degree in additional than three years

Consumer confidence has slumped to its lowest level in more than three years.

Households have become ‘increasingly downbeat’ ahead of next week’s Budget, said experts at S&P Global, which compiles the consumer sentiment index.

Cost-of-living pressures combined with fears of interest rate hikes sent the index to 41.3 in October from 42.7 in September. It was the lowest level since July 2023.

Maryam Baluch, economist at S&P Global Market Intelligence, said: ‘Any ‘Burnham bounce’ has proved short-lived, eclipsed by the impact on the cost of living from events in the Middle East and the accompanying prospect of higher interest rates.

‘October has brought a growing conviction among households that borrowing costs will rise imminently as the Bank of England seeks to tame inflation.

‘Households will need to start feeling brighter about their financial prospects and job security than we’re seeing in the lead up to the Budget if hopes of stronger growth… are to become anything more than wishful thinking.’

Cost of living pressures combined with fears of interest rate hikes sent the consumer sentiment index compiled by S&P Global to 41.3 in October from 42.7 in September