Following steady improvements in UK economic indicators this year and expectations of a post-election and post-rate cut boost, consumer confidence deteriorated sharply in September amid concerns regarding the economic outlook and negative signals ahead of the new government’s first Budget. Persistent caution has also been reflected in slowing consumer credit growth over recent months.
There are though continuing green shoots of economic improvement, principally the Bank of England’s move to begin reducing its base rate which fell to 5.0% in August. Other positive signs include sustained GDP growth over Q2 2024, a drop in the unemployment rate to 4.1%, and strong decreases in shipping freight rates.
Despite these positive signs, all eyes will be on the UK Government’s Budget announcement on 30 October as businesses and consumers seek stimuli and positive signals to advance from the primarily cautious economic environment and drive some much-needed growth.
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