Consumer confidence has “collapsed” as the Middle East conflict raises fears of soaring inflation over the coming months, new figures indicate.
A British Retail Consortium (BRC) survey by Opinium, conducted between 10 and 13 March, shows consumer expectations for the economy over the next three months fell to a record low of minus 53, from minus 30 in February.
Expectations for personal finances also hit a record low of minus 17, down from minus six. Spending predictions, however, rose seven points to 13, as shoppers anticipate rising energy costs.
BRC chief executive Helen Dickinson said: “Consumer confidence collapsed as the Middle East conflict raised the prospect of higher inflation in the months ahead. As stock markets tumbled, confidence in both the economy and personal finances dropped to their lowest levels on record.
“The drop in confidence was most pronounced among the Boomer generation, who are most reliant on investment and pension funds.”
Ms Dickinson added: “The current conflict has created a great deal of uncertainty in the economy. Inflation is expected to rise in the coming months.
“Just as the economy was beginning to turn a corner on inflation, the rise in global energy prices is particularly unwelcome for businesses and families. It is now vitally important that Government policy does not exacerbate the situation, and bringing down the cost of living must be a top priority.
“From new employment laws to rising packaging taxes, Government must focus on how it can minimise unnecessary costs to retailers, thereby helping protect ordinary households from the rising cost of living.”
The conflict is into its fourth week after the US and Israel launched attacks on Iran on 28 February, leading to subsequent retaliation, and it remains unclear as to when the war could end.
Opinium surveyed 2,000 UK adults between March 10-13.
