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Wed 17th Oct 2018 - UK consumer confidence dips following record highs as Brits prepare to rein in non-essential spending
UK consumer confidence dips following record highs as Brits prepare to rein in non-essential spending: UK consumer confidence has dipped in the third quarter of 2018 following record highs, with Brits preparing to rein in non-essential spending, according to the latest Deloitte Consumer Tracker. Confidence fell three percentage points in the period, down to minus 7% after the previous quarter’s record level of confidence. The quarterly survey recorded its first fall in consumer confidence since the second quarter of 2017. Following a year of consistent growth, culminating in a record level of UK consumer confidence in the second quarter of 2018 (minus 4%), consumer optimism has now fallen to where it was a year ago. Consumers are significantly less confident about their level of household disposable income, falling by eight percentage points compared with the second quarter, the sharpest quarterly fall since the tracker began in 2011. During the same time, confidence in levels of debt declined five percentage points – its biggest quarterly drop since the second quarter of 2012. The latest tracker also found UK consumers are spending less as a result of being more cautious about their personal finances. Pressures on disposable income and debt have led to spending in essential and discretionary categories both falling two percentage points compared with the previous quarter. At a year-on-year level, discretionary spending fell slightly, one percentage point, while spending on essentials remained flat. During the next three months, respondents expect to increase their spending on essential items by one percentage point. However, consumers said they intend to rein in non-essential spending, with expectations of spending in discretionary categories over the next three months falling four percentage points. Deloitte chief economist Ian Stewart said: “The reality of higher inflation and August’s interest rate rise has dented optimism about spending power. Meanwhile, uncertainty and the manner in which the UK exits the EU in less than six months is creating an additional headwind for consumers.” Ben Perkins, head of consumer research, added: “There is a ‘morning-after-the-night-before’ feel to the findings of this quarter’s consumer tracker. After a spring of festivities that included a royal wedding, World Cup fever and scorching sunshine, consumer spending in the third quarter has had a bit of a reality-check.”


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