Consumer confidence drops in October

The dip comes despite lower retail price inflation and accelerating wages growth, suggesting Brexit uncertainty continues to dampen the outlook. The overall index score has stayed between -7 and -10 throughout 2018, according to the barometer, which is carried out by GfK on behalf of the European Commission.

Consumers’ outlook on their personal financial situation over the next year has worsened slightly, with the measure falling by one point to +4 – the same level as October 2017.

The perception of how the UK’s overall economic situation will fare over the next 12 months has also worsened, decreasing by one point to -28.

The measures for both personal finances and the general economic situation during the past year have not changed in October.

Joe Staton, client strategy director at GfK, said: "The prospect of a no-deal/hard-deal Brexit must surely be weighing heavily on people’s minds, injecting a mood of despondency as to how people view their future personal finances and the longer-term economic outlook for the UK."

Meanwhile, the Major Purchase Index, which measures whether now is a good time to make large purchases such as furniture, has dropped by two points to +4 in the lead up to the Christmas period.

Staton said: "With no immediate prospect of any feel-good news impacting our hearts, minds and wallets, the Index is set for further declines. It looks like the UK government will need to administer an exceptionally strong tonic to the nation to settle the obvious Brexit anxieties."

Research published last week by Trajectory found that optimism among British consumers had declined to its lowest all year, with 35% of respondents expecting to be worse off in 2019.