Confidence plunges to lowest since mid-2023 amid global tensions and economic strain

UK consumer confidence has fallen to its lowest point since mid-2023, with Deloitte’s latest tracker pointing to a broader weakening in household sentiment as inflation, job-market worries and geopolitical tensions weigh on spending plans.

Sharp drop driven by income pressures

According to Deloitte, its Consumer Tracker showed confidence down by 3 percentage points, driven by a sharp deterioration in perceptions of household disposable income and discretionary spending. The firm said the quarterly fall was the steepest since early 2022, underscoring how quickly sentiment has turned as families face renewed pressure on budgets.

Rising job market anxiety

A separate Deloitte update also showed consumers growing more anxious about work, with sentiment on job security and career prospects both slipping. That matters for the housing market as well as the wider economy: when households feel less secure about income and employment, they are typically more cautious about major purchases, refinancing decisions and commitments to fixed-rate borrowing.

Geopolitical tensions add to uncertainty

The unease has been compounded by events abroad. Renewed conflict risk in the Middle East added to market nerves on Monday after the United States said it had seized an Iranian cargo ship it accused of trying to breach a blockade, prompting threats of retaliation from Tehran. Against that backdrop, Deloitte’s Céline Fenech said many households were already under strain from slower wage growth and a cooling labour market, adding that a more stable economic outlook would be needed before sentiment can recover.

Property market shows signs of cooling

Signs of softer demand are also visible in property. Rightmove said asking prices rose by 0.8% month on month in April, but noted that the increase was weaker than usual for a period when the market often picks up. Colleen Babcock, a property expert at the portal, said higher mortgage rates were helping to keep growth strongest in parts of the market less exposed to borrowing costs, while more rate-sensitive segments were losing momentum.

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