Consumer confidence in the UK dropped sharply in September, according to the British Retail Consortium’s Consumer Sentiment Monitor.
The report showed worsening expectations for personal finances and the broader economy as the public prepares for chancellor Rachel Reeves’ upcoming October Budget.
Consumer expectations for their personal financial situation over the next three months fell to -6 in September, down from +1 in August.
Meanwhile, confidence in the state of the economy declined sharply, with expectations plunging to -21 from -8.
Personal spending on retail improved slightly to -8 from -9, but overall spending sentiment dropped to +10 from +11.
Savings expectations also worsened, falling to -9 from -4.
BRC chief executive Helen Dickinson warned of the potential challenges facing retailers in the months ahead: "Retailers could face a turbulent few months as consumer confidence fell significantly in September.
“Negative publicity surrounding the state of the UK’s finances appears to have damaged confidence in the economic outlook, particularly among older generations.
“Despite this, expectations for future retail spending, while negative, did not yet appear to have been adversely affected, with many consumers expecting to reduce the amount they save instead."