UK Consumer Confidence Plunges Ahead of Budget, GfK Reports

British Consumer Confidence Plunges Ahead of Budget

British consumer sentiment suffered its sharpest month-on-month decline since the early months of the COVID-19 pandemic, dropping 11 points to -24 in October 2026, according to survey data published by Reuters. Conducted between October 1 and 14 among 2,003 adults, the GfK consumer confidence index fell to its lowest level since April, missing all forecasts in a Reuters poll and creating a difficult political backdrop for finance minister John Healey’s upcoming budget.

UK Consumer Sentiment Suffers Largest Drop Since 2020

The October reading reversed a brief recovery that peaked in September at -13, which had marked the highest reading since August 2024. The 11-point slide is the largest single-month drop since April 2020, when the United Kingdom entered its first coronavirus lockdown. Excluding the pandemic era, a contraction of this magnitude last occurred following the June 2016 Brexit vote.

GfK reported that no single catalyst drove the downturn. Instead, the firm pointed to a combination of rising inflation, the ongoing conflict in the Middle East, and a general squeeze on household finances.

Finance Minister John Healey has stated an intention to provide households and businesses with breathing space in his upcoming budget. Healey has maintained an optimistic stance on the broader economy, highlighting that the UK’s economic growth in the first half of the year was jointly the fastest in the Group of Seven. However, recent surveys from S&P Global and LSEG/Ipsos corroborate the downward trend in consumer sentiment, undercutting the recovery that took hold around the time Andy Burnham became prime minister.

Consumers Show Deep Pessimism as Inflation Expectations Climb

The speed of this deterioration is alarming, said Neil Bellamy, consumer insights director at GfK, as reported by Reuters.

Consumers expressed deep pessimism regarding the broader economy, while the major purchase index—which measures appetite for big-ticket purchases—fell to its lowest point in more than two years. At the same time, consumer inflation expectations climbed to their highest level since April, touching a peak not seen in nearly three and a half years. These mounting price pressures are expected to draw scrutiny from the Bank of England ahead of its anticipated interest rate decision next month.

More on this story: UK inflation climbed to 3.5% in September on fuel price surges