Consumer confidence dips for second time in 2014
The Lloyds Bank Spending Power Report for September finds that consumer confidence has dropped for the second time this year, falling six points to 146. September also saw a 15 point fall in sentiment towards the UK’s economic situation from last month, to 275 points reflecting a level of uncertainty leading up to the Scottish Referendum. The current situation also saw a dip in confidence, dropping 13 points to 176.
For the third month in a row, continued falls in spending left overall essential spend around 0.5% lower than this time last year. Among categories of essential spending, there has been no growth on food and drink spend in the last three months. This could be attributed to supermarket price wars, which are having an impact on the frontline for consumers.
The fall in spending on fuel continues to accelerate, with average spending around 6% lower than this time last year, keeping a lid on the rise in the cost of living. The growth rate on gas and electicity is also slowing, with customer spend around 5% lower than this time last year.
Patrick Foley, chief economist at Lloyds Bank, said: “While confidence has moderated a little this month, consumer sentiment remains positive overall, reflecting the signs of continued economic recovery. Though wage growth remains only muted, with essential expenditure placing less demand on household finances, consumers are finding more scope for discretionary spending.”
