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Brits’ confidence in the economy has fallen again ahead of the much-awaited government Budget next week.
Confidence had been returning after years of the pandemic, rising prices and higher interest rates, but has now fallen for three months in a row, according to GfK’s monthly consumer confidence index.
Keir Starmer has said the Budget next week will be “painful” with higher taxes set to combine with spending cuts. M&S boss Stuart Machin said this week that “consumer confidence has nosedived after all the doom and gloom.”
GfK said Brits are in a “despondent mood” ahead of the Budget.
Business confidence is also fragile, according to two surveys released on Thursday. The Confederation of British Industry said its measure of optimism among manufacturing firms fell at the fastest pace in two years, while the preliminary S&P Global Flash Composite Purchasing Managers’ Index for October said confidence was at its lowest level since November 2023.
GfK’s survey found Brits’ view on the general economic situation over the last 12 months was down five points to -42 in October, its lowest level since March. However, it is still 12 points higher than October 2023.
Confidence in their personal financial situation and the general economic outlook for the next 12 months both fell by one point.
It meant the GfK’s headline overall consumer confidence was down by one point.
“As the Budget statement looms, consumers are in a despondent mood despite a fall in the headline rate of inflation,” said Neil Bellamy, GfK’s consumer insights director.
“This month’s Consumer Confidence Barometer paints a picture of people holding their breath to see what’s in store for them on 30th October.”
GfK interviewed 2,001 people between 1 October and 15 October.
Morning Update
Remy Cointreau downgraded its expectations for the year after sales tumbled 16% in the first half of the year.
The company said it now expects a double-digit decline in sales over the course of the year instead of the “gradual recovery” it forecast previously.
Organic sales fell 15.9% to €534m in the first six months of the year, led by big declines in the Americas and EMEA. Analysts had predicted a 15.4% decline.
Sales in the Americas were down 23% due to “continued destocking”, while EMEA fell 19% “reflecting persistently variable consumer trends”.
China and Southeast Asia also drove an 8% decline in APAC. Beijing imposed temporary anti-dumping measures on brandy imports from the European Union earlier this month.
Remy Cointreau’s share price is down more than 50% since January.
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