UK Consumer Confidence Plummets to 2-1/2-Year Low

The UK GfK Consumer Confidence Index dropped four points to -25 in April 2026, its largest decline in a year and the lowest level since October 2023, falling short of market expectations of -24. The sharp downturn reflects deepening concerns over the economic fallout from escalating Middle East tensions, with pessimism spreading across both personal finances and the broader UK economy. Households are increasingly anxious about rising prices, particularly at fuel pumps, which are straining budgets, as well as the prospect of further cost hikes in the months ahead.

The UK GfK Consumer Confidence Index fell to -21 in March 2026 from -19 in February, marking its lowest level in nearly a year as concerns over the Middle East conflict’s impact on inflation and growth weighed on sentiment. The largest decline came in households’ assessment of the general economic outlook for the next 12 months, which dropped 6 points, while views of personal finances remained steady. The report also showed a 4-point fall in willingness to make major purchases and a 6-point rise in the savings rate. British consumers faced surging energy costs, with petrol prices up roughly 50% since the Iran war began, while government support for households reliant on heating oil remained limited. Neil Bellamy, Consumer Insights Director at GfK, said: “People simply do not feel the economy is robust enough to ride out the knock-on effects from the Middle East conflict.”

The UK GfK Consumer Confidence Index fell to -19 in February 2026 from -16 in January, reversing the gains recorded over the previous two months and undershooting market expectations for an improvement to -15, as rising unemployment weighed on sentiment. The jobless rate climbed to a post-pandemic high of 5.2% in the three months to December, while youth unemployment surged to 16.4%, its highest level in over a decade. Neil Bellamy, Consumer Insights Director at GfK, said the trend “is increasing concerns about job security, particularly given the backdrop of weak wage growth.” He added that “with fewer entry-level opportunities available, those on lower incomes are already feeling the strain and this trend risks undermining the typically more optimistic outlook held by younger age groups.” The overall decline was largely driven by deteriorating views of personal finances, with respondents reporting a four-point drop in assessments of both the past year and the year ahead.