UK consumer morale has fallen to its lowest level since mid 2023, according to recent surveys, reflecting mounting pressure on households from inflation fears and global uncertainty.
Data from the British Retail Consortium shows a sharp deterioration in sentiment in March 2026. Households’ expectations for the economy over the next three months dropped significantly, while confidence in personal finances also weakened, both hitting their lowest levels in at least two years.
The downturn is being driven largely by external shocks, particularly the economic ripple effects of tensions in the Middle East. Rising energy and fuel costs have increased concerns about inflation, prompting consumers to cut back on discretionary spending and delay major purchases.
Surveys also indicate a behavioural shift. Many households are prioritising savings over spending, with travel and other non essential sectors already seeing declines. Retailers have begun to feel the impact, warning of softer demand as shoppers become more price sensitive and cautious.
Broader indicators reinforce this trend. The long running consumer confidence index compiled by GfK fell further into negative territory in March, alongside a drop in willingness to make large purchases and a rise in savings rates.
Economists say the weakening morale highlights the fragility of the UK’s economic outlook. With inflation risks resurging and geopolitical tensions persisting, consumer sentiment is expected to remain subdued in the near term, raising concerns about slower growth and the potential for a broader economic slowdown.
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