UK Consumer Confidence Plummets Amid Global Turmoil and Domestic Strains

Consumer confidence in the UK has plunged to its lowest level in over two years, as households face a perfect storm of rising prices, global instability and economic uncertainty.

New figures show a sharp seven-point drop in overall confidence during April, taking the index down to -53 – matching the depths seen during the height of the cost-of-living crisis. The fall reflects deepening concerns over where the economy is heading, with almost two-thirds of people expecting conditions to worsen over the next 12 months.

The gloomy mood comes amid intensifying global tensions and economic pressures. The reintroduction of trade tariffs by the United States, ongoing conflict in Ukraine, and concerns about inflation have all contributed to the sense of unease. Domestically, a rise in taxes and continued price pressures have left many families feeling financially stretched.

Confidence in personal finances has also taken a hit. Expectations for household finances over the coming year fell by ten points to -19 – the lowest level seen since mid-2023 – while current confidence dropped by six points to +21. Millions are struggling to keep up with everyday costs, with nearly two million households missing key payments such as rent, mortgage, or utility bills in the month to mid-April.

To cope, almost half of all households have made changes to their spending habits. Many are cutting back on essentials, dipping into savings, or taking on debt to cover basic needs.

There are calls for stronger protections to support consumers and restore trust. The argument is that clear action is needed to clamp down on fraud, misleading business practices and unfair pricing, all of which undermine confidence and restrict spending.

Adding to the concern is a separate dip in broader economic confidence, as consumers report growing worries about the general outlook for the UK. Sharp increases in council tax, road tax, and utility bills have added further pressure, just as inflation risks are forecast to rise again.

As the year unfolds, rebuilding consumer confidence will be vital for the health of the economy. Without it, many households are likely to remain cautious, dampening demand and slowing recovery. Clear leadership and targeted support may be key to helping families weather the storm ahead.

Source: The Guardian