UK consumer confidence has fallen to its lowest level in three years as households become increasingly concerned about interest rates, mortgage costs and job security.
The S&P Global consumer sentiment index dropped to 42.7 in September, from 42.9 in August. More than half of 1,500 respondents said they expected borrowing costs to rise over the next year.
The average two-year fixed mortgage rate has reached 5.88%, while the five-year rate stands at 5.92%. Rising borrowing costs are expected to further pressure household finances.
Confidence in the jobs market has also weakened, with concerns over artificial intelligence and slower hiring contributing to the decline. Meanwhile, only 17% of businesses surveyed by the British Chamber of Commerce plan to increase investment.
The figures come ahead of the UK government’s October budget, amid expectations of possible tax increases.
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