UK consumer confidence has been hit by fears over the budget, and the government’s gloomy warnings, a survey has found.
The British Retail Consortium (BRC) has reported that households’ assessment of the general economic situation over the next three months has slumped this month.
People are also more worried about their personal financial situation, after heavy hints from Downing Street that October’s budget will include tax rises.
Older people’s confidence in the economic outlook has taken a particular blow, the BRC said – perhaps a sign of the damage caused by the cuts to winter fuel payments for pensioners.
Helen Dickinson, the chief executive of the BRC, said consumer confidence “fell significantly” in September, adding: "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."
Europe is struggling to cope with much higher energy prices than the US and a lack of investment, putting the brakes on growth, the European Bank for Reconstruction and Development (EBRD) has warned.
The bank, which lends to countries across eastern Europe, central Asia and north Africa, revised down its expectations of growth this year and next year, saying many countries would be unable to grow more quickly after a resurgence in gas and electricity prices.
While oil prices have stabilised at about the average levels seen between 2017 and 2021, “gas in Europe remains relatively expensive, trading at almost five times the US price, and some economies in the EBRD regions are paying significantly higher average import prices for gas than Germany”, the bank said in its latest regional economic prospects report.
Expected growth across the EBRD region this year was downgraded by 0.2 percentage points from a previous forecast in May to 2.8%.
In 2025, it expects growth of 3.5%, 0.1 percentage points below the previous projection.
The EBRD has also cut its growth forecast for Ukraine, warning that it is taking an economic hit from Russian attacks on its energy infrastructure.
The EBRD lowered its forecast for Ukraine’s economic growth to 4.7% next year from 6% in May because of the attacks, after an expected expansion of 3% this year.
Those attacks are forcing Ukraine to rely on more expensive imports as it builds alternative sources of energy, the EBRD said.
Elon Musk’s comments about the summer riots in the UK have cost him a place at next month’s international investment summit, the BBC reports.
The summit is part of the Labour government’s push to stimulate economic growth, by attracting more spending to the UK, and is expected to take place at a central London location.
The goal is to show that the UK is “open for business” under a new government.
But the BBC’s Faisal Islam reports that Musk, the world’s richest person, has not been invited to the summit in response to his social media posts during last month’s riots.
The agenda
• 1.30pm BST: US GDP report for Q2 2024 (final reading)
• 2.30pm BST: Christine Lagarde speech at a conference on new frontiers in macroprudential policy in Frankfurt
• 2.20pm BST: the Federal Reserve chair, Jerome Powell, to speak at the 2024 US Treasury market conference in New York
We’ll be tracking all the main events throughout the day ...
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