Consumer confidence in the UK economy has sharply declined over the past year, according to data from Which?’s Consumer Insight Tracker. The confidence index dropped by 31 points, from an average of minus nine between May and July 2024 to an average of minus 40 in the same period this year. During this time, 56% of people believed the economy would deteriorate, while only 16% expected improvement.
Which? highlighted this as a “significant fall,” marking some of the lowest confidence levels since early 2023, a period characterised by the cost-of-living crisis and double-digit inflation. The decline in confidence was particularly pronounced last autumn and remained low from February to May.
Although there has been a slight recovery, confidence levels are still considerably lower than a year ago. Pensioners have been the most pessimistic demographic, with their confidence plummeting from an average of minus five last year to minus 63 currently. This decline followed the government’s initial decision to scrap the winter fuel allowance for most pensioners, a measure that was later reversed.
The data suggests that financial strains from the peak of the cost-of-living crisis persist. In the month leading up to 18 July, an estimated 2.1 million households missed at least one essential payment, such as rent, mortgage, or utility bills. Furthermore, 49% of households made adjustments to cover essential expenses, including cutting back on necessities, using savings, selling possessions, or borrowing.
Rocio Concha, Which?’s director of policy and advocacy, stated: “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.”
Concha emphasised the need for robust consumer protections to inspire spending confidence, urging the Government to prioritise these measures in its economic growth plans.
