Consumer confidence in the future UK economy has plummeted over the last year, figures suggest.
Which? said the figures showed a “significant fall” to some of the lowest levels seen since early 2023, when the cost-of-living crisis was in the headlines and inflation was in double figures.
Confidence in the future economy declined sharply last autumn and was particularly low between February to May, when global events such as the US tariff policy contributed to the pessimism.
Confidence had recovered a little since, but remained considerably lower than 12 months ago.
Confidence has tumbled by 31 points over the last year, from an average of minus nine between May and July 2024 to an average of minus 40 between May and July this year, Which?’s Consumer Insight Tracker shows.
On average between this May and July, 56 per cent of people thought the economy would get worse and just 16 per cent thought it would get better.
Pensioners have been the most pessimistic group, with their confidence in the future UK economy falling dramatically from an average of minus five between May and July last year to a current average of minus 63.
Pensioners’ confidence dropped dramatically in autumn last year – shortly after the government’s first announcement of scrapping the winter fuel allowance for most pensioners – and has remained low since, in spite of the Government U-turn on fuel payments.
Which?’s figures suggest that financial difficulties from the height of the cost-of-living crisis are yet to return to the previous levels.
In the month to July 18, an estimated 2.1 million households missed at least one essential payment such as rent or mortgage payments, utility bills, credit card or loan payments.
An estimated 13.9 million households (49 per cent) also made at least one adjustment to cover essential spending such as utility bills, housing costs, groceries, school supplies and medicines in the last month – such as cutting back on essentials, dipping into savings, selling possessions or borrowing.
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Rocio Concha, Which? director of policy and advocacy, said: “Our research shows consumer confidence in the future of the UK economy has dropped alarmingly over the last year.
“The government has rightly focused on growing the economy and raising living standards but in doing so, it must not overlook the importance of consumer protections in restoring confidence.
“People are sick to the teeth of having to dodge fraudsters when shopping online, watching out for rogue traders when making home improvements and needing to keep an eye out for dodgy pricing practices which mean that offers aren’t as good as they first appear.
“The right consumer protections give people the confidence to spend and the government must place these protections at the heart of its plans to grow the economy.”
