Gold prices tick higher on fresh US tariff threats, Fed rate cut hopes
Investing.com -- Consumer confidence in the U.K. has fallen to its lowest level in more than a year, as households face rising costs and renewed fears over the economic impact of U.S. President Donald Trump’s trade measures.
The GfK consumer confidence index dropped four points to -23 in April, marking the weakest reading since November 2023. The decline reflects the pressure from domestic tax increases, higher household bills, and concerns that Trump’s tariffs could trigger another inflationary wave.
Neil Bellamy, consumer insights director at GfK, said consumers had not only been dealing with “multiple April cost increases” in the form of utility bills, council tax, stamp duty and road tax, but were also “hearing dire warnings of renewed high inflation on the back of the Trump tariffs”.
Trump’s latest round of tariffs has disrupted the global markets and raised the risk of a broader economic slowdown. While the direct inflationary impact outside the U.S. remains uncertain, disruptions to supply chains could push up prices in the U.K. as well.
According to GfK’s data, the measure of expectations for the general economic situation in the next 12 months dropped by eight points to -37, significantly worse than the reading from April 2024. The outlook for personal finances also weakened, falling four points to -3, which is five points lower year-on-year.
Falling sentiment levels often signal caution ahead, with households potentially cutting back on major purchases as financial uncertainty grows.
U.K. inflation has come down from its late-2022 peak of 11.1% and now stands at 2.6%. However, the Bank of England forecasts a temporary rise to 3.7% this summer before easing toward its 2% target over the next two years.
Bellamy raised the possibility that the U.K. could be “on the verge of another round of rapidly increasing prices” tied to the effects of Trump’s trade policies. “If so, consumer confidence is likely to collapse, and the broad gains seen since the disastrous September 2022 mini-budget – when confidence hit a record low of -49 – could quickly be eroded.”