Tax rises in budget sap UK consumer confidence and will hit pay growth, say reports

S&P Global Market Intelligence says the government failed to build on the underlying improvement in consumer sentiment before and after the election. Photograph: Jordan Pettitt/PA

Tax rises in the budget have sapped consumer confidence and will lead to sharp reductions in private sector pay growth next year, two separate reports have said.

In a blow to Rachel Reeves’s efforts to boost growth, a survey by S&P Global Market Intelligence showed that consumer confidence dropped this month after households said the outlook for the economy had deteriorated and the prospects for their own finances had worsened.