British households’ expectations for their own finances and the state of the economy have fallen to their weakest in at least two years as the Middle East conflict raised the prospect of higher inflation, according to a survey on Thursday.
The British Retail Consortium said households’ view of the likely state of the economy over the next three months sank to -53 in March from -30 in February, while their assessment of the prospects for their own finances dropped to -17 from -6, with both measures the lowest since the survey began in March 2024.
“Consumer confidence collapsed as the Middle East conflict raised the prospect of higher inflation in the months ahead,” BRC Chief Executive Helen Dickinson said. “The drop in confidence was most pronounced among the Boomer generation, who are most reliant on investment and pension funds.”
Following are further highlights from the release and related context:
- Spending expectations rose as shoppers expected to see rising energy costs reflected across the economy
- Food and groceries was the main category of retail and leisure spending where households expect to spend more over the next three months
- Data is based on a sample of 2,000 adults by polling company Opinium, collected from March 10-13
- The Bank of England this month forecast inflation would rise to 3.0-3.5% over the next couple of quarters
- The Confederation of British Industry said retailers reported the sharpest annual fall in sales since April 2020 this month.
