'Extraordinary collapse' sees consumer confidence suffer biggest slump in a decade

Updated: 02:00 EDT, 23 October 2026 Britain has suffered an ‘extraordinary collapse’ in consumer confidence as Trumpflation wipes away hopes of a ‘Burnham bounce’.Closely-watched figures from market researchers GfK showed confidence has suffered its sharpest drop for a decade this month in what was described as an ‘alarming’ deterioration.The fall of 11 points to minus 24 in October was the biggest since July 2016 – excluding the pandemic – according to GfK.Household gloom has deepened particularly over the outlook for the economy. Consumer appetite to make major purchases – such as washing machines and sofas – also slumped.It comes as Donald Trump’s Iran war continues to result in high global oil and gas prices which have pushed up the price of fuel and household energy in a phenomenon dubbed ‘Trumpflation’.There is little sign of relief, with oil benchmark Brent crude yesterday hitting $112.68 a barrel, a five-month high. GfK's consumer confidence Index fell 11 points to minus 24 in October as households struggle with a rise in the cost of livingAnd wage growth is slowing, with figures from the Office for National Statistics (ONS) yesterday showing the average salary in Britain increasing by just 4.5 per cent – the weakest since 2021.GfK’s figures represent a blow to Prime Minister Andy Burnham’s attempts to lift the mood with promises of cost of living help and optimism about reviving prosperity.And they come just days before a debut Budget from Chancellor John Healey - as his options for delivering relief to consumers are narrowed by the deteriorating state of the public finances.Neil Bellamy, consumer insights director at GfK, said: ‘There has been an extraordinary collapse in consumer confidence in October.‘These are damaging findings given the UK government’s priority of economic growth.‘Relentless cost-of-living pressures… appear to have swept aside the nascent optimism we saw following the appointment of a new UK prime minister this summer.‘Headline consumer confidence is now back to the level seen in April, May and June of this year and the summer’s buoyant mood has evaporated. The speed of this deterioration is alarming.’It comes after figures this week showed inflation surging to 3.5 per cent, an 11-month high, thanks to rising petrol and diesel prices.Inflation is expect to climb to 4 per cent in the new year, with an energy prices increase in January set to push typical household bills towards £2,000.That is well above the Bank of England’s 2 per cent target, adding to fears that a widely-expected hike in interest rates next month will be followed by further increases over the course of 2027.Another grim update this week revealed that UK job vacancies have fallen below 700,000 to a 12-year low – excluding the 2020 pandemic.The ‘jobs drought’ has been widely blamed on Labour making it increasingly expensive to hire by raising employer national insurance and sharply increasing the minimum wage.Separate troubling data this week, revealing that the UK national debt has climbed above £3 trillion for the first time, illustrates the headache facing Healey as he tries to find the money to help households.With bond markets watching closely for evidence of a plan to tackle the debt and UK ten-year borrowing costs already close to 19-year highs, the Chancellor cannot afford to splash out on unaffordable support packages.DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you