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The cost of living crisis has knocked UK consumer confidence down to its lowest level since the pandemic, as rising food and energy bills hammer families.
There has been a “significant and sustained drop-off in consumer sentiment”, leading to the biggest one-year drop in confidence since the global financial crisis, a new report from PwC this morning shows.
Its index of UK consumer confidence has dropped to -20 this month, from +10 last summer. That’s barely above the -26 recorded at the start of the pandemic two years ago.
PwC warns that this dramatic drop shows the impact that the cost of living crisis is having across the UK.
Lisa Hooker, Leader of Industry for Consumer Markets, PwC UK, says:
“This shift in sentiment is both significant and sudden, with consumer spending expectations moving towards more essential areas at the expense of discretionary items. Businesses that help customers by offering them the options to trade down are more likely to keep their loyalty for when things get better.”
The 30-point drop over the last nine months is the biggest sustained decline in PwC’s survey since the 2008 Global Financial Crisis, as households face the biggest squeeze in in decaces.
Energy bills have just soared, and could do so again in October, while food price inflation is the fastest in 10 years.
More details to follow…..
Also coming up today
Eurozone finance ministers will discuss the impact of the war in Ukraine on Europe’s economies when they hold a Eurogroup meeting today, as pressure grows for a ban on imports of Russian gas.
They will also discuss how a digital euro could be designed, and the trade-offs between privacy and preventing money laundering, illicit financing and tax evasion.
European stock markets have opened a little higher, despite worries over rising inflation, slower growth and the impact of the Ukraine war.
- 7am BST: German trade balance for February
- 10.05am BST: Bank of England governor Andrew Bailey: Speech at the Stop Scams Conference
- From 2pm BST: Eurogroup meeting of eurozone finance ministers in Luxembourg.
- 3pm BST: Bank of England deputy governor Sir Jon Cunliffe speech at a European Economics & Financial Centre seminar
- 3pm BST: US factory orders for February