Consumer confidence in economy falls

Consumer confidence in the future UK economy has plummeted over the last year according to Which?’s Consumer Insight Tracker. According to the tracker, consumer confidence has tumbled by 31 points over the last year, from an average of -9 between May and July 2024 to an average of -40 between May and July 2025. This is because, on average between May and July 2025, 56 per cent of people thought the economy would get worse and only 16 per cent thought it would get better. 

This is a significant fall and sees consumer confidence in the future economy return to some of the lowest levels seen since early 2023, when the cost of living crisis was in the the headlines and inflation was in double figures. 

Confidence in the future economy declined sharply last autumn and was particularly low between February to May, when global events such as the United States’ tariff policy  contributed to the pessimism. Confidence has recovered a little since, but remains considerably lower than twelve months ago. 

Pensioners have been the most pessimistic group about both the future economy and their future household finances. Their confidence in the future UK economy fell dramatically from an average of -5 between May and July 2024 to an average of -63 a year later. 

Pensioners’ confidence dropped dramatically in autumn 2024 – shortly after the government’s first announcement scrapping the winter fuel allowance for most pensioners – and has remained low since, in spite of the government U-turn on fuel payments. 

This comes as many households are still struggling to make ends meet and cover the cost of everyday essentials. Which?’s tracker shows that financial difficulty rose during the height of the cost of living crisis and has yet to return to the pre-crisis levels. 

In the month to 18th July 2025, an estimated 2.1 million households missed at least one essential payment – such as rent or mortgage payments, utility bills, credit card or loan payments. 

An estimated 13.9 million households (49%) also made at least one adjustment to cover essential spending such as utility bills, housing costs, groceries, school supplies and medicines in the last month. Adjustments include cutting back on essentials, dipping into savings, selling possessions or borrowing. 

Over the last year, the government has talked tough about slashing regulatory red tape in its efforts to boost the economy and drive up living standards. However, as it pushes to grow the economy, it is crucial that the government does not compromise on important protections. Well-designed laws and regulations that empower people to switch from bad to good services and give them confidence to try new products without fear of being ripped off are essential to boosting consumer spending and creating dynamic markets. 

At a time when many UK households are struggling with the cost of living and concerned about economic turbulence at home and abroad, Which? is calling on the government to put the needs of UK consumers at the heart of its plans for economic growth. 

Rocio Concha, Which? Director of Policy and Advocacy, said “Our research shows consumer confidence in the future of the UK economy has dropped alarmingly over the last year. 

“The government has rightly focused on growing the economy and raising living standards but in doing so, it must not overlook the importance of consumer protections in restoring confidence. 

“People are sick to the teeth of having to dodge fraudsters when shopping online, watching out for rogue traders when making home improvements and needing to keep an eye out for dodgy pricing practices which mean that offers aren’t as good as they first appear. The right consumer protections give people the confidence to spend and the government must place these protections at the heart of its plans to grow the economy.”