Consumer confidence plummets to the lowest levels since the cost of living crisis

Consumer confidence in the future of the UK economy has plummeted to the lowest levels seen since the height of the cost of living crisis due to concerns about global events such as the impact of the US tariffs and war in Ukraine, according to the Which? Consumer Insight Tracker. 

According to the tracker, consumer confidence in the future UK economy fell by seven points to -53. This is because 64 per cent of consumers believe the UK economy will get worse in the next 12 months while only 11 per cent believe it will get better. 

This marks the lowest level since December 2022 when the cost of living crisis was at its height and the inflation rate was above 10 per cent. 

Respondents who reported being pessimistic why they felt so negatively about the future UK economy, nearly seven in 10 (67%) said it was because of global events such as the war in Ukraine and the US tariffs and trade policy. Other commonly cited reasons include changes in prices (63%) and government tax changes (60%).

Confidence in future household finances also fell significantly – by ten points to -19 – to  the lowest level reported since July 2023 and confidence in current household finances decreased by six points to +21.

This comes as the estimated number of households missing essential payments – such as rent or mortgage payments, utility bills, credit card or loan payments – remained at similar levels to March, at 1.9 million households in the month to 11 April. 

The proportion of renters missing rent payments increased to 4.7 per cent in the last month, suggesting many are still struggling to make ends meet due to ongoing cost of living pressures.

An estimated 13 million households (46%) 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. This is slightly lower than the 51 per cent seen in March. 

As it pushes to grow the economy and restore people’s confidence, the government must make sure it is acting in the best interests of consumers. 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. 

Rocio Concha, Which? Director of Policy and Advocacy, said “Our research shows consumer confidence in the future of the UK economy has fallen to the lowest levels seen since the height of the cost of living crisis. 

“Consumer protections give people the confidence to spend, so whether it’s rooting out online fraudsters, taking down rogue traders or tackling misleading business practices, the government must do more to place consumers at the heart of its plans to grow the economy and restore people’s confidence.”