Confidence in the state of the economy has slid to its lowest level since last spring, according to the British Retail Consortium (BRC).
The trade body’s latest monthly survey — conducted among 2,000 UK adults — shows consumer confidence tumbling to a net balance of -37, down three points from January and marking an 11-month low.
The report follows fresh data revealing that inflation rose to 3 per cent in January, unexpectedly propelled by higher food and travel costs. Personal financial sentiment posted the sharpest drop, slipping seven points to -11. Helen Dickinson, the BRC’s chief executive, warned that shoppers are braced for more expensive bills in the coming months, citing rising energy charges, a planned rise in employer National Insurance contributions from April, and new packaging levies.
“Consumers’ expectations of the economy have plunged by nearly 40 points since last summer’s general election,” Dickinson said. “Coupled with £7 billion in additional costs faced by retailers, including higher National Insurance and packaging levies, many businesses are signalling potential hiring freezes and entry-level job cuts.”
According to the Office for National Statistics, food and drink prices in January reached a 3.3 per cent annual increase — the highest in ten months. Chris Hare, senior economist at HSBC, called the spike in food costs “unhelpful” for the cost of living, cautioning that if everyday inflation remains high, consumer sentiment and spending could remain subdued.
Read more:
Inflation fears push consumer confidence to 11-month low