1 week Ago By [email protected] (Amber Murray)
Despite robust wage increases, consumer confidence remained static in the first quarter of the year amid ongoing economic concerns, according to Deloitte. Consumer confidence edged up slightly by 0.3 percentage points during the initial three months of 2025, but the nation's sentiment towards the UK economy has sunk to its nadir in over a year, as reported by .
"The consumer recovery appears to have stalled despite continued strong wage growth, with uncertainty around the economy and other factors such as geopolitical tensions playing on the minds of consumers," commented Celine Fenech, who serves as Deloitte's consumer insight lead. A decline in consumer sentiment regarding debt levels was noted, alongside dwindling confidence in household income and job prospects. "As inflation persists, particularly on food and utilities, consumers are being more tactical in the way they spend, with a focus on essentials and looking for discounts and promotions when making purchases," Fenech further noted.
With inflation reported at three per cent for the year's first trimester, exceeding the rate of two per cent, there's a degree of hesitance from the Bank to lower interest rates further. In excess of half the consumer population indicated they had lesser disposable income this quarter in comparison with the last. This development occurs even as annual earnings, bonus pay excluded, experienced a hike of 5.
9 per cent across November 2024 through January 2025. Is there trouble on the horizon? Helen Dickinson, Chief Executive of the British Retail Consortium (BRC), has warned that global economic turbulence could further impact consumer confidence and spending. "Global uncertainties resulting from tariffs and a potential slowdown could reduce the appetite for shopping trips in the coming months," she stated.
Ian Stewart, Chief Economist at Deloitte, suggested that this uncertainty would make it more challenging for businesses to pass on increased wage and other costs to consumers. Last week, British businesses were hit with a multibillion-pound wave of increased costs due to changes in employer's national insurance (NICs) and the minimum wage. "A revival in consumer spending will be dependent on the jobs market holding up and inflation pressures remaining contained," Stewart commented.
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