Consumer sentiment across the UK has fallen in July, as rising inflation puts pressure on shoppers’ finances, according to data from the BRC-Opinium.
Consumer expectations over the next three months for the state of the economy declined to -33, down from -28 from June.
People’s expectations about their financial situation also worsened. For this index, it declined from -5 in June to -7 in July.
However, the personal financial situation on retail and personal spending overall both saw an uptick month on month, rising to +3 and +16 respectively. This was an improvement from +2 and +12 in June.
Expectations for personal savings also inched up slightly from June to July – from -4 to -3.
BRC chief executive Helen Dickinson said: “With the UK economy shrinking for the second consecutive month, it is little surprise that consumer confidence fell in July.
“Rising inflation, particularly for food, has put more pressure on personal finances, increasing the cost of living. This has caused spending expectations to rise, particularly for groceries, as households anticipate higher prices at the till.
“Despite fierce competition between retailers, retail inflation has risen steadily over the last nine months as a result of the chancellor’s last Budget, which significantly increased employment costs.
“Further tax rises hitting the retail industry at the next Budget would likely fan the flames of inflation as retailers are forced to increase prices. The chancellor has the opportunity to support households and high streets: the proposed business rates reforms could make the system fairer, provided the government ensures that no store pays more as a result.”
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