Consumer sentiment falls sharply

24th January 2025

Consumer confidence in the UK’s economy has plummeted, with the British Retail Consortium’s (BRC) consumer sentiment index revealing a drop to -34 in January, down from -27 in December.

The survey indicates that only those aged 18-27 expect improvement, while two-thirds of individuals aged 60-78 anticipate a worsening economy.

Helen Dickinson, chief executive of the BRC, said “As the government warns of tough times ahead, it is little surprise that the public have caught the January blues. Consumer confidence in the economy fell to a new low, with concerns most pronounced among older generations. Gen Z (18-27) remain the only group to expect the economy to improve, while two-thirds of Boomers (60-78) expect things to get worse. Feelings around people’s own finances fell slightly, with older generations remaining the most pessimistic. Expectations of retail spending and wider spending both fell significantly, though much of this is likely to be the end of the Christmas period, as people tightened their belts for the new year ahead.

“On top of this challenging market backdrop, retailers are facing £7bn in additional costs from the Budget and new packaging levy. With retailers’ tight margins leaving little scope to absorb more costs, many are warning of price rises and job cuts in the coming months. To mitigate this, and shore up investment in shops and entry level jobs, the Government must ensure that no shop ends up paying a higher business rates bill because of its proposed reforms.”