British consumers’ outlook on their personal finances and the broader economy has deteriorated to its lowest point in over two years, as tensions in the Middle East have heightened concerns about rising inflation. The British Retail Consortium (BRC) revealed on Thursday that households’ expectations for the economy over the next three months plunged to -53 in March, down from -30 in February. Similarly, confidence in their own financial prospects declined to -17 from -6, marking the lowest levels since the survey’s inception in March 2024.
Helen Dickinson, Chief Executive of the BRC, noted that consumer confidence sharply declined due to fears of increased inflation triggered by the Middle East conflict. The most significant drop was observed among the Baby Boomer generation, who tend to depend heavily on investments and pension funds for financial security.
Meanwhile, despite the overall pessimism, spending expectations showed an uptick as consumers anticipated higher energy prices to impact the economy. Food and groceries emerged as the primary retail and leisure category where households expect to increase their spending over the coming three months.
The survey data was collected by polling firm Opinium from a sample of 2,000 adults between March 10 and 13. In a related development, the Bank of England projected inflation to rise to between 3.0% and 3.5% over the next few quarters. Additionally, the Confederation of British Industry reported that retailers experienced the steepest annual decline in sales since April 2020 during the same period.
