UK consumer confidence has fallen this month, as households grow gloomier about their financial prospects.

The latest poll of consumer sentiment, just released by data firm S&P Global, shows that households reported that their current finances continued to deteriorate in November, while pessimism about the financial outlooks for the year ahead has risen.

Households across the UK reported further pressure on their everyday spending, which ate into the amount of cash they had available to spend. It has fallen again this month, at a faster rate than in October.

Debt levels rose in November for the first time in three months, the survey found.

A gause of job security also declined, which could be driven by the increase in employer National Insurance contributions announced in the Budget.

The poll shows that the budget, at the end of October, has not lifted confidence among households.

Worryingly, confidence dropped this month despite the Bank of England cutting interest rates two weeks ago, just as S&P Global began polling households.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said:

“November is seeing households grow somewhat gloomier again, failing to build on the underlying improvement seen in the months leading up to the General Election.

Consumer confidence has fallen back since spiking higher in July amid the election buzz, as ongoing pressure on household finances has resulted in squeezed spending, higher debt and lower savings.

A key concern going forward will be the labour market. Rising incomes and busier workplaces have underpinned much of the improvement in consumer sentiment over the past two years, but job security is showing signs of waning. Any intensification of job worries, spurred perhaps the recent measures announced in the Budget, including higher employer National Insurance contributions, could result in a further loss of consumer confidence. This would likely in turn hit consumer spending and economic growth.

Analysts at Goldman Sachs have predicted that the increase in employers’ national insurance contributions will weigh on the economy in 2025.

In their outlook for the UK economy next year, just released, Goldman say they think growth is likely to cool later in 2025.

They believe that wage growth will slow, as firms pass on the impact of higher NICS bills onto their workforce.

Goldman say:

We expect consumer spending growth to moderate in H2 next year as real disposable income growth falls back. This partly reflects slowing real wage growth; we expect private sector pay increases to cool, partly because of the employer National Insurance Contributions increase being passed on to consumers.

Net interest is likely to become a headwind as effective mortgage rates continue to drift up while deposit rates gradually decline. And there is likely to be a continued drag on disposable income from the ongoing freeze on personal income tax thresholds.

Trade tensions under the Trump administration will also hurt the UK economy next year, Goldman predict, even if Britain avoids tough new tariffs.

They say:

Although our base case is that the US only imposes very limited tariffs on the UK, the threat of more significant tariffs is likely to generate uncertainty in the near term, which should weigh on demand.

And we expect that uncertainty around tariffs will notably reduce Euro area growth, which is likely to generate spillovers to the UK.

The higher employment costs announced in last month’s budget are likely to push more companies into financial trouble, insolvency advisers Begbies Traynor warned this morning.

Begbies Traynor also cautioned that firms will be hurt by the prospect that UK borowing costs remain high for longer than hoped.

In a trading update, Ric Traynor, executive chairman of Begbies Traynor Group, told the City:

“Additional headwinds for UK business from increased employment costs and the prospect of higher for longer interest rates are likely to extend the period of elevated insolvency levels, increasing the need for advice and support from our insolvency and business recovery professionals.”

Begbies has already been busy; it has reported a 16% increase in revenues and adjusted pre-tax profits for the six months to the end of October.

Ric Traynor says:

“We have made a very good start to the year with double digit growth in revenue and profits driven by positive momentum across the group. This gives us confidence that we will deliver market expectations for the year as a whole.

Reeves’s decision to raise employers’ national insurance contributions (NICs) has been criticised by retailers, especially in the services sector, and disability charities. The UK minimum wage is also increasing from April.

Marks & Spencer have warned that budget measures could cost it more than £60m next year, while Sainsbury’s expects to pay another £140m in NICs, which could push up prices on the shelves.

The Bank of England expects interest rates to fall more slowly, as inflation is likely to be higher due to the measures in the Budget.

Donald Trump could knock almost 1% off the size of the UK economy if he imposes new tariffs on imports into the US, analysts have warned.

The CEBR thinktank have calculated that if the US imposes a 20% tariff on all imports, and a 60% tafiff on China, it could reduce the UK economy by 0.9% by the end of the Trump administration, even if other countries don’t retaliate.

The CEBR cautions that Trump’s re-election could reshape global dynamics, “particularly in trade, energy, and environmental policy”.

There is also a risk that energy prices are pushed higher (leading to higher bills) if retaliatory action is taken agaisnt US tariff.

The CEBR say:

During Trump’s first term, the Brent-WTI price differential peaked at $7.34 per barrel in 2019, roughly a 118% increase from the start of his administration, despite a drive to boost domestic oil and gas production. This was largely driven by buyers’ reluctance to purchase US energy exports.

However, shifts in global energy dynamics mean significant oil price rises are less likely this time around. China, once a major importer of US energy commodities, now sources discounted supplies from Russia, while its domestic economic slowdown has dampened its energy demand. OPEC also has spare production capacity, given it is currently implementing an output cut of 2.2 million barrels a day to support prices.

The easiest way for the UK to avoid Trump tariffs would be to agree to a Free Trade Agreement, the CEBR adds. This could reduce existing trade barriers, as well as dodging new tariffs.

CEBR adds:

Unfortunately, the major sticking point to a deal remains food standards, and tariffs may be used to pressure the UK to accept US demands in this regard.

Last weekend, one of Trump’s senior advisers said the UK “has to choose” between the European Union and US economic models, and that the next president would be more willing to clinch a free trade agreement with the UK if it turns away from the EU’s “socialism”.

The oil price is rising this morning, after the conflict between Russia and Ukraine intensified last weekend.

Brent crude, the international benchmark, is up 0.3% at $71.26 per barrel, having hit its lowest level since the start of October on Friday.

The rise follows the fierce missile and drone attack launched by Russia last weekend at Ukraine’s energy grid, which killed seven people and forced nationwide electricity rationing to be introduced today.

Ukrenergo, Ukraine’s principal energy supplier, said blackouts and consumption restrictions would be introduced “in all regions” as engineers tried to repair as much of the damage to power facilities as possible.

Russia has also accused Joe Biden’s administration of “trying to escalate the situation to the maximum”, after the White House lifted the ban on Ukraine using long-range missiles to fire into Russian territory yesterday.

This morning’s prediction of a small rise in energy bills in January will be “disappointing”, says Dr Craig Lowrey, Principal Consultant at Cornwall Insight, especially as the weather gets chillier.

“Our final price cap forecast for January indicates, as expected, bills will remain largely unchanged from October. Supply concerns have kept the market as volatile as earlier in the year, and additional charges have remained relatively stable, so prices have stayed flat. While we may have seen this coming, the news that prices will not drop from the rises in the Autumn will still be disappointing to many as we move into the colder months.

“Fuel poverty has occupied political agendas for years, with little long-term progress. This winter, millions of households say they will not heat their homes to recommended temperatures, risking serious health consequences. With it being widely accepted that high prices are here to stay, we need to see action. Options like social tariffs, adjustments to price caps, benefit restructuring, or other targeted support for vulnerable households must be seriously considered.

“Long-term, our transition away from the volatile global wholesale market toward sustainable, home-produced renewables can help to secure our energy future. Although the transition does require upfront investment, it promises lower bills down the line. The government needs to keep momentum on the transition while acknowledging that immediate support is essential for those struggling now. Inaction is a choice to leave people in the cold.”

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Household energy bills across Great Britain are set to rise at the start of next year, analysts predict, putting more pressure on household finances.

Officially, the price cap for January-March 2025 will be set on Friday morning by regulator Ofgem, limiting what energy providers can charge in England, Scotland and Wales.

But analysts at Cornwall Insight have crunched the numbers, and predict that the cap for a typical dual fuel household will rise to £1,736 per annum in January, up from the current level of £1,717 per year set in October.

This is a rise of 1% from the current price cap – a blow to hopes that bills might drop at the start of 2025.

Importantly, though, the cap limits the amount that a consumer can be charged for each unit of energy – not a ceiling on potential bills, which are usually higher in the winter as households spend more to keep warm.

Cornwall Insight, whose calculations are based on the wholesale price of energy, say:

The cap level is a reflection of a relatively volatile wholesale market, influenced by supply concerns tied to geopolitical tensions, maintenance on Norwegian gas infrastructure, weather disruptions, amongst other smaller factors.

Despite prices stabilising in comparison to the past two years, the market remains very sensitive to global events. This is leaving prices substantially above historic averages.

At the end of September, Cornwall had expected the price cap would dip in January, but wholesale energy prices have been higher than hoped.

Last Friday, the month-ahead price of UK gas rose to a one-year high of almost 120p per therm.

Gas prices rose last week, after Austrian group OMV warned of a potential disruption to supplies from Russia. On Saturday, Gazprom did indeed stop supplies to Austria, after OMV won a €230m arbitration award against Russia’s state-owned natural gas company.

Looking further ahead, Cornwall currently forecast the cap will drop slightly in April 2025 and again in October 2025.

The agenda

• 8am GMT: Bundesbank President Joachim Nagel gives speech

• 10am GMT: Eurozone trade balance for September

• 3pm GMT: US Nahb Housing Market Index