Deutsche Bank's fear index signalled rising anxiety across income groups, prompting downgrades and sell-offs among major UK retailers. Associated British Foods was cut to "sell" and fell 4 per cent, while Wickes slumped 8.6 per cent after a "sell" downgrade and Kingfisher dropped 4.3 per cent. Next and Asos also lost value, and combined market capitalisation of six companies fell by about £965 million. Analysis of household cashflows indicates consumers are cutting discretionary spending and increasing savings despite higher wages. Higher-income households are unusually more worried about tax rises, while the poorest families face inflationary pressure, with inflation at 3.8 per cent in July and grocery prices up 4.9 per cent.
Almost £1 billion was wiped off the stock market value of Britain's biggest retailers on Tuesday after Deutsche Bank warned that consumer confidence is sliding sharply ahead of the autumn budget. The bank's so-called fear index points to rising anxiety across all income groups, with shoppers concerned about job losses, frozen tax thresholds, and the prospect of further fiscal tightening from Chancellor Rachel Reeves.
Deutsche Bank's analysis of household cashflows suggests Britons are holding back on discretionary spending despite higher wages, with many saving more as a hedge against uncertainty. The index showed that, unusually, higher-income households are now more worried about the financial outlook than lower-income groups. Analysts said wealthier consumers are increasingly sensitive to potential tax rises in October's budget, while the poorest families remain under pressure from inflation.
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