Consumer confidence showed modest signs of improvement in December after the Autumn Budget proved less damaging for households than many had feared.
But sentiment remains firmly in negative territory as shoppers continue to rein in retail spending according to the latest BRC-Opinium Consumer Sentiment Monitor.
Latest results show that expectations for the state of the UK economy over the next three months improved to minus 38 in December, from minus 44 in November. Views on personal finances also edged higher, rising to minus 10 from minus 16.
However, confidence around retail spending weakened further. Expectations for personal spending on retail fell to plus 6 in December, down from plus 8 the previous month, marking the third consecutive monthly decline.
HOUSEHOLD PRESSURES
By contrast, expectations for overall personal spending increased slightly to plus 17, up from plus 14, suggesting consumers are prioritising non-retail essentials and experiences over discretionary purchases.
The data also pointed to growing pressure on household balance sheets. Expectations for personal saving deteriorated to minus 9 in December from minus 5 in November, indicating that fewer consumers expect to be able to put money aside as they head into the new year.
The British Retail Consortium said the figures highlight the fragile mood among consumers, despite the easing of some immediate fiscal concerns following the Budget.
Confidence in the economy has now remained below minus 30 for eleven of the past 12 months, reflecting ongoing anxiety about the cost of living, job security and the broader economic outlook.
OVERALL PICTURE REMAINS GLOOMY
Helen Dickinson, Chief Executive of the British Retail Consortium, says: “With the Budget not as bad as feared for households, confidence saw a slight uptick in December.
“Yet the overall picture remains gloomy, with confidence in the economy stuck below -30 for eleven out of last twelve months.
“Expectations for retail spending continued to slide for the third consecutive month, proving challenges remain in the year ahead.”
ALLOW BUSINESS TO FLOURISH
And she adds: “Government needs to pull the levers of growth, tearing down red tape and bureaucracy to allow businesses to flourish and create more jobs.
“From the Employment Rights Bill to rules on less healthy foods, the Government must consider the cumulative impact of its policies on business, ensuring new regulations are workable and do not punish responsible businesses.”
