Consumer confidence in the UK has dropped to its lowest point since the beginning of the cost of living crisis. This decline is fueled by concerns over US tariffs and the ongoing war in Ukraine.
According to a recent survey, almost two-thirds of respondents expect the economy to get worse within the next year, while only 11% are optimistic about improvement.
The consumer trust tracker hit its lowest mark since December 2022, falling seven points to -53, coinciding with a time when inflation surpassed 10%—well above the Bank of England’s goal of 2%.
Nearly 70% of participants expressed pessimism about the economy, attributing their concerns to global issues like the war in Ukraine and Donald Trump’s trade policies.
Other factors contributing to their worries include rising prices mentioned by 63% of respondents and changes in government taxes noted by 60%.
This data aligns with findings from GFK, where Neil Bellamy, the consumer insight director, pointed out that many are grappling with multiple increased costs starting in April, such as higher utility bills and taxes. He also remarked on the alarming impact of high inflation exacerbated by tariffs.
Trust in future household finances has taken a hit, dropping from -19 to -10 points, while current household financial confidence decreased by six points to +21.
The proportion of households struggling with essential payments like rent, mortgages, and utility bills has remained steady since March, with estimates suggesting that between 5.6% and 7.7% of households have missed or defaulted on payments.
The percentage of tenants behind on rent has risen to 4.7% in the last month, reflecting ongoing struggles to meet financial obligations amid rising living costs.
Approximately 13 million households—nearly half of all households—had to make at least one adjustment to manage crucial expenses last month, such as energy and housing costs, food, school supplies, and medicines. Adjustments often included cutting back on essentials, dipping into savings, selling belongings, or borrowing. This marks a decline from 51% in March.
“We’re holding the world accountable for policy and advocacy,” stated Rocio Concha, director of policy and advocacy. “Consumer protection is essential for boosting spending confidence. Whether it’s tackling online scams or misleading business practices, governments need to prioritize consumer trust to encourage economic growth.”
