UK consumer confidence drops as households brace for another cost of living squeeze

For many households, the “cost of living crisis” has felt inescapable and never-ending.And now, a PwC report has found that people seem to be bracing for yet another financial shock.It said that UK consumer confidence has seen its lowest quarterly decline in four years (in 2022, or four years ago, inflation reached a then-41-year high of 11.1%; PwC point out this is the “sharpest quarterly decline in sentiment since the onset of the Ukraine war”).It’s the lowest overall score since 2023.“All age groups are concerned about the rising cost of living, with most people planning short-term cutbacks and sentiment among the under-35s the hardest hit.”What are the most common concerns? 90% of respondents said they were most worried about the cost of living.80% said they plan to cut household spending in the coming months (food price surges are reportedly expected by some in November 2026). Twice as many respondents (12% vs 24%) said they planned to drive less to save on fuel costs in the April survey than they did in the January survey. And a majority of under-45s – 65% – said they were worried about their job security and/or prospects.The 2,000-person-strong survey, conducted after the Easter bank holidays, also found that members of every age group felt less financially healthy than they did in the previous quarter. “In contrast to previous cost of living shocks, the gap between more and less affluent households has narrowed, while the gap between the young and old has widened,” the accountancy firm said.What has caused these concerns?PwC said that “Food prices, which are already on the rise, typically have the biggest influence on cost of living perceptions, and are expected to climb further” later on in the year.They also pointed out that pay rises are usually given in April. They speculated that if households haven’t been given those by now, they might have begun to budget for a leaner-than-anticipated financial year.Then, there’s the fact that the energy price cap will be removed in July. Many are expecting price hikes post the closure of the crucial shipping channel, the Strait of Hormuz.Though the report did not mention the US-Iran conflict directly, so far, it has “doubled” the cost of jet fuel, led the UK government to plan for food shortages, and may have even affected the pickle market.  Related...How Trump's Iran War Is Fuelling UK Cost-Of-Living CrisisThe Shift In Boys’ Views On Money And Girls That Therapists Are Watching CloselyHow The Cost Of Living Crisis Is Impacting UK Birth Rates

PwC survey reports fast fall in consumer confidence with people worried about Iran war’s impact on economy and personal financesBritish households are bracing for a new cost of living crisis, as the impact of the Middle East conflict dampens confidence in the economy and personal finances, a survey has suggested.Consumer confidence in the UK has dipped over the last three months at the fastest rate since June 2022, when inflation in the UK was soaring as a result of Russia’s invasion of Ukraine and the spike in commodity prices. Continue reading...