A new survey suggests that British households are bracing for renewed financial pressure as conflict in the Middle East dampens economic confidence.
Consumer confidence in the UK has fallen at its fastest quarterly rate since June 2022, when inflation surged after Russia’s invasion of Ukraine pushed up global commodity prices.
The survey, which tracks measures such as spending intentions and how financially secure people feel, recorded a score of -13 in April. That marks a sharp drop from -1 in January and the weakest reading since autumn 2023.
Confidence in household finances fell across all age groups. Younger people remained more optimistic than older consumers, but the picture among under-35s also weakened. The proportion who said they felt financially healthy fell by 20%, while the share struggling or in difficulty with bills and finances rose by 9%.
Almost 90% of the 2,068 consumers surveyed said they were concerned about the cost of living. Nearly 80% said they planned to reduce spending over the next three months.
Rising fuel costs are also changing behaviour. The proportion of consumers planning to drive less to save money has doubled since January, rising from 12% to 24%.
The Bank of England said that higher UK inflation would be “unavoidable” because of the Middle East conflict, with fuel, food and energy costs likely to rise. ONS figures show CPI inflation rose to 3.3% in March, up from 3% in February and above the Bank’s 2% target.
Job vacancies also fell in April, marking the 30th consecutive monthly decline. However, employers appear to be relying more on temporary staff, with temporary billings rising at their strongest pace in two-and-a-half years.
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