Consumer confidence in the º£½ÇÊÓƵ economy has taken a hit this January, with sentiment diving further as people brace for more challenges ahead. The British Retail Consortium's (BRC) latest survey saw a net -34 of participants predicting downturn in the coming three months, a decline from December's -27 figure.
This pessimism has reached a nadir since the BRC began measuring this sentiment in March 2024, as reported by .
The findings come amidst a spate of lacklustre economic indicators suggesting a significant deceleration in the latter part of the previous year. Newly released data highlights that November saw only a modest 0.1% growth after two preceding months of slight contraction.
Adding to concerns, retail sales unexpectedly shrunk last month, and the December purchasing managers’ index (PMI) slumped to its lowest point in over a year.
With most analysts in agreement that the economy was virtually stagnant towards year-end, there is renewed apprehension regarding inflation which is expected to climb once again. Experts predict that key inflation rates could exceed 3% by spring due to heightened energy costs, a depreciating pound, and recent Budget implications.
These developments have cast fresh uncertainties on the economic forecast for the º£½ÇÊÓƵ in 2025. "It is little surprise that the public have caught the January blues," stated Helen Dickinson, chief executive of the BRC.
She cautioned that the Chancellor's decision to increase employers' national insurance and raise the minimum wage could have a significant impact on the retail sector. "With retailers’ tight margins leaving little scope to absorb more costs, many are warning of price rises and job cuts in the coming months," she stated.
The survey suggested that concerns about the economy were most acute among the "older generations", with two-thirds of boomers (60-78) predicting a decline. Gen Z (18-27) was the only group expecting the economy to improve over the next three months.
Despite the severe downturn in the wider economy, consumer expectations about their personal financial situation only dropped to -4 from -3 the previous month.
