U.K. October Consumer Sentiment Falls to Six-Month Low, GfK Says
U.K. consumer confidence fell to a six-month low in October as Britons become more pessimistic about their finances and spending, GfK NOP Ltd. said.
An index of sentiment declined to minus 30 from minus 28 in September, the London-based research group said in an e-mailed report today. A gauge of how consumers see their personal financial situation over the next year dropped 5 points to minus 13, also the lowest in six months.
Britain exited a recession in the third quarter as gross domestic product surged the most in five years. Still, the Confederation of British Industry said yesterday that while its retail sales index rose to a four-month high in October, “uncertainty over the global economic outlook could dent consumer confidence, hitting prospects for the retail sector.”
“While the Olympics are thought to have boosted GDP in the last quarter, the late summer boost in consumer sentiment has now faded,” said Nick Moon, managing director of social research at GfK. “The fragility of the recovery is underlined by the fact that people are more worried about their own financial situation over the next 12 months. This certainly doesn’t suggest there will be a spending boom on the back of the official emergence from recession.”
A measure of Britons’ outlook for the economy over the next 12 months fell 2 points to minus 29 in October, GfK said. A gauge of the climate for making major purchases decreased 2 points to minus 33. GfK interviewed 2,004 people between Oct. 5 and Oct. 14.
Bank of England Governor Mervyn King said earlier this month that cooling inflation over the past year has “somewhat” eased the squeeze on consumers. Still, policy makers have said the inflation outlook remains uncertain as energy costs increase. Officials will decide on Nov. 8 whether to extend so- called quantitative easing after they complete their latest round of bond purchases next month.
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