Confidence in the UK economy among UK consumers fell sharply this month, foretelling a ‘spending squeeze’ to start 2025, the British Retail Consortium warned on Monday.

The BRC consumer spending monitor for December showed a drop in public confidence in the state of the UK economy, while plans for personal spending also fell. The index is based on a survey of 2,000 adults in the UK by BRC and Opinium, conducted between December 10 and 13.

The personal financial situation index remained in negative territory, though steady, at minus 3 points, BRC said. However, the index for the state of the economy fell to negative 27 points in December from negative 19 in November, and the overall personal spending index fell to negative 3 points from positive 3.

‘The public’s spending intentions – both in retail and beyond – dropped 6pts, with expectations of spending in nearly every retail category falling. If these expectations are realised, retailers could find themselves facing a New Year spending squeeze just as they unveil their January sales,’ commented BRC Chief Executive Helen Dickinson.

‘The weak spending intentions could pave the way for a challenging year for retailers, who face being buffeted by low consumer demand and £7 billion of new costs from the [UK government] budget set to hit the industry in 2025.’

Copyright 2024 Alliance News Ltd. All Rights Reserved.