UK consumer confidence has seen a marked decline, reaching its lowest point this year according to recent surveys, with individuals increasingly cutting back on discretionary spending and bracing for economic uncertainties.
Recent data indicates a significant downturn in consumer sentiment. A survey by KPMG released on October 3, 2025, revealed that consumer confidence in the UK economy hit its lowest point of the year. This downturn has led to a reduction in spending across various categories.
Spending Shifts: Consumers reported spending less on eating out (40% less), takeaway food (34% less), and clothing and footwear (33% less). Conversely, spending on essentials like groceries saw an increase, with 33% of consumers reporting spending more.
Brand Loyalty Fades: There's a clear move towards value. Consumers are buying own brand / value products more (24%) and opting for promotional or discounted items (25%) and lower-cost retailers (22%) more often, while reducing purchases of full-price branded produce (21% less).
Financial Prudence: The primary financial actions taken by consumers over the past three months included reducing monthly spending on everyday items (56%), saving more as a contingency (38%), and deferring big-ticket purchases (38%). Concerns about job security and rising costs are palpable.
Further compounding this trend, a report by Deloitte, published three days ago, noted the biggest drop in consumer confidence in four years. This decline is partly attributed to a decrease in sentiment regarding job security, which fell 2.1 percentage points on the previous quarter and 6.2 percentage points year-on-year.
Economic Gloom Deepens
The prevailing mood is one of apprehension, with several reports highlighting a persistent lack of faith in the UK's economic future.
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Job Security Worries: Deloitte's surveys, conducted around June 2025 and reported on July 21, 2025, pointed to deepening worries over income, debt, and employment security as primary drivers of declining sentiment. This anxiety is fueled by persistent inflation and a strained job market.
Historical Lows: The Trading Economics data for February 27, 2026, shows UK Consumer Confidence at -25 points in April 2026, a decrease from -21 points in March. This figure sits significantly below the historical average of -11.18 points since 1981. The lowest recorded point was -49 in September 2022.
Pensioner Pessimism: A report from Which? on August 19, 2025, highlighted an "alarming" drop in confidence over the past year, particularly among pensioners. Their confidence in the future UK economy plunged from an average of minus five to minus 63.
Shifting Consumer Behaviour
The economic headwinds are visibly altering how consumers approach their finances and spending habits.
Leisure Under Pressure: While some minor increases in spending on holidays were noted, broader leisure activities such as eating out and drinking in pubs are seeing planned increases in spending for the next three months according to a Deloitte report published on November 21, 2025, suggesting a potential future rebound that might still be some way off. However, the immediate data from KPMG shows significant reductions in spending on dining and entertainment.
Cost of Living Squeeze: Rising household utilities, rent/mortgage costs, and general perceptions of the state of public services and media coverage are significantly impacting consumer outlook.
The broader economic context involves a slowing wage growth, a cooling jobs market, and lingering inflation concerns, all contributing to a more cautious consumer base. While some surveys have shown temporary upticks in sentiment, the overall trend suggests a sustained period of belt-tightening. The impact of potential policy decisions, such as upcoming budgets, also looms large, adding another layer of uncertainty for consumers.
