British households are becoming increasingly cautious about their finances, with a new survey pointing to growing concern over rising costs and economic uncertainty.
Consumer confidence fell sharply in April, recording its fastest quarterly decline since June 2022—the period when inflation surged following Russia’s invasion of Ukraine and the resulting spike in global commodity prices.
The survey, which measures factors such as spending intentions and perceptions of financial wellbeing, found confidence had dropped to -13, down from -1 in January. It is the weakest reading since autumn 2023 and suggests many households are becoming more concerned about the months ahead.
The deterioration was evident across all age groups. While younger consumers remained generally more optimistic than their older counterparts, confidence among under-35s also weakened significantly. The proportion who described themselves as financially healthy fell by 20%, while the number struggling with bills and day-to-day finances rose by 9%.
The cost of living remains the dominant concern. Nearly 90% of the 2,068 people surveyed said they were worried about rising costs, while almost four in five expect to cut back on spending over the next three months.
Higher fuel prices are already influencing behaviour. The proportion of people planning to drive less to save money has doubled since January, rising from 12% to 24%, reflecting growing sensitivity to energy-related costs.
Much of the concern stems from renewed tensions in the Middle East, which have pushed up oil prices and raised fears of further increases in fuel, food and household energy bills. The Bank of England has acknowledged that some inflationary pressure linked to the conflict is likely to be unavoidable.
Recent figures from the Office for National Statistics underline the challenge. Consumer Price Index (CPI) inflation rose to 3.3% in March, up from 3% in February and still well above the Bank’s 2% target.
The labour market is also showing signs of strain. Job vacancies fell again in April, marking the 30th consecutive monthly decline and suggesting businesses remain cautious about hiring. However, employers appear to be seeking flexibility rather than cutting recruitment entirely, with demand for temporary workers rising at its fastest rate in two and a half years.
Taken together, the data paints a picture of households becoming more defensive. Spending plans are being reassessed, confidence is slipping, and concerns about rising prices are returning to the forefront—raising the prospect of another squeeze on living standards just as many families had hoped conditions were beginning to improve.
