UK consumer confidence slumped in October, falling to levels seen in the early summer as the cost-of-living crisis weighed on household finances, and further declines in sentiment are likely, the head of a leading survey told MNI.

"After a summer of steady and perhaps surprising gains in sentiment, the index reversed course abruptly in October, as the worry of simply not having enough money to make ends meet is still exerting acute pressure for many consumers," said Joe Staton, Client Strategy Director, GfK

Gfk's Overall Index Score fell nine points to -30 in October, with all five measures in the index falling compared to the previous month and little respite seen even though the Bank of England Monetary Policy Committee kept its benchmark interest rate unchanged in September after fourteen consecutive hikes.

RISING COSTS

"Accelerating costs of heating homes, filling petrol tanks, coping with surging mortgage and rental rates, a slowing jobs market and uncertainties posed by conflict in the Middle East, are all contributing to this growing unease, Staton said, though he added that geopolitical events were not a prime driver of the decline in sentiment, with little change in the pattern of survey responses in the aftermath of the Oct 7 attacks on Israel.

The forward-looking Personal Financial Situation (PFS) reading fell 6 points to -8, and the Major Purchase Index was down 14 points at -34.

"The timing of the sharp drop in our major purchase measure will concern retailers across the land in the run-up to Christmas. The volatility we are seeing in consumer confidence is a sure sign of a depressed economic mood and there’s no immediate prospect of any improvement,” Staton added.

It would be surprising to see a recovery in sentiment in the immediate future and "a further decline could probably be expected," he said.