Consumer confidence falls sharply after Rachel Reeves stripped winter fuel payments from millions of pensioners, survey reveals

Consumer confidence has fallen sharply after Labour stripped winter fuel payments from millions of pensioners and warned of painful measures in next months Budget.

A closely-watched survey from market research firm GfK showed its headline measure of confidence fell to a six-month low in September.

The figures came as the Resolution Foundation think-tank warned that the government would struggle to meet its target of achieving the best growth in the G7 under current plans - and needed to be bolder.

It is the latest evidence that any hopes that Labours election could usher in a period of stability and growth are starting to ebb away amid a welter of doom and gloom.

Consumer confidence has fallen sharply after Labour stripped winter fuel payments from millions of pensioners and warned of painful measures in next months Budget. Stock image

The dire warnings have fuelled fears that Chancellor Rachel Reeves will stage a major raid that could cover pension savings, inheritance tax and capital gains tax

Claims that it inherited the worst economic situation since the Second World War - and has discovered a £22billion black hole in public finances - have cast a pall of pessimism that has engulfed investors as well as beleaguered voters who may have been hoping for sunnier days ahead.

And the dire warnings have fuelled fears that Chancellor Rachel Reeves will stage a major raid that could cover pension savings, inheritance tax and capital gains tax.

Neil Bellamy, consumer insights director at GfK, said there had been steep falls in consumers views on their personal financial situation, the general economy and big-ticket purchases.

Despite stable inflation and the prospect of further cuts in the base interest rate, this is not encouraging news for the UKs new government, Bellamy said.

Strong consumer confidence matters because it underpins economic growth and is a significant driver of shoppers willingness to spend.

Following the withdrawal of the winter fuel payments, and clear warnings of further difficult decisions to come on tax, spending and welfare, consumers are nervously awaiting the Budget decisions on October 30.

It cautioned that Deputy Prime Minister Angela Rayners workers rights plans - which will include day one rights for new employees - needed to be carefully implemented so as not to get in the way of the jobs market

Meanwhile, a new report from the Resolution Foundation questioned whether the government would be able to achieve its aim of achieving the strongest economic growth among the G7 group of advanced countries, led by the United States.

It said plans to boost infrastructure and build more homes could feasibly get Britain halfway towards that goal and will need to be more ambitious in other areas including on investment.

And it cautioned that Deputy Prime Minister Angela Rayners workers rights plans - which will include day one rights for new employees - needed to be carefully implemented so as not to get in the way of the jobs market.

Emily Fry, senior economist at the Resolution Foundation, told the BBC: In its plans so far it can only really reach about half of the gap with the US so there really is a lot more to do.