- According to the latest GfK Consumer Confidence Index, consumers have become much more pessimistic. The index fell 11 points to -24 in October, its largest monthly decline since the Covid pandemic. The biggest falls were in expectations for the economy and consumers’ willingness to make major purchases, both down 14 points on the previous month. The fall in confidence comes as inflation begins to rise again, with higher energy costs adding further pressure to household budgets.
- The latest retail data from the ONS paints a more mixed picture. Retail sales volumes fell 0.4% in September compared with August but remained 0.8% higher than a year earlier. The share of online sales also increased over the 12-month period, rising from 28.0% in September 2025 to 28.8% in September 2026. So, while consumers are clearly feeling less confident, the deterioration in sentiment has not yet been matched by an equivalent year-on-year fall in retail spending.
- The recent Budget may ease some of the pressures weighing on households, with measures aimed at energy, fuel and food costs, alongside support for retail, hospitality and leisure businesses through the business-rates system. However, inflation is expected to remain elevated for now, meaning a rapid recovery in consumer confidence is far from guaranteed.
- The question now is whether October’s sharp fall in confidence is an early warning of weaker household spending, or whether sentiment has simply deteriorated faster than consumers’ actual behaviour. The run-up to Black Friday and Christmas will provide an important test. For retailers, the key question is whether October’s confidence shock proves to be primarily a change in mood, or the beginning of a more meaningful pullback in spending. October's retail figures may also be affected by a short-term increase in spending on emergency supplies following the Government's preparedness campaign, with some retailers already reporting large increases in demand for tinned food, bottled water and other essentials.
Consumer confidence slumps, but will spending follow?
30 September 2026
