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Wednesday, Oct 21, 2026

Cost of living worries sends consumer confidence into 'freefall', says study

Cost of living worries sends consumer confidence into 'freefall', says study

Based on 6,000 interviews across the month, the confidence survey measures attitudes to household finances, property prices, job security and business activity.

Concern about the cost of living has hit a record high as UK households continue to "bear the brunt".

A new survey says confidence in household finances over the short term, hit an all-time low in April, dropping by six points on the previous month and a "massive" 57 points compared with April last year to 56.7.

The 12-month outlook also hit a new low, inching downwards from 49.1 to 48.3.

The study from YouGov and the Centre for Economics and Business Research (CEBR) found that overall consumer confidence has fallen one point since March but 7.6 points since this time last year.

Other metrics such as house value, job security, and business activity remain stable, the survey suggests.

The new statistics come ahead of the release of new UK GDP figures which are expected to put growth at 1% for the first quarter of this year, down from 1.3 for quarter 4 last year.

Last week the Bank of England warned of double-digit inflation and a high risk of recession.

Households were asked how they think their financial situation will change in the next year and the survey then assigns a score based on the responses.

Anything above 100 is positive, while if it falls below 100 households are expecting to be worse off.

The score was above 100 around a year ago, but has been falling in recent months.

Feeling the squeeze


Based on 6,000 interviews across the month, the confidence survey measures attitudes to household finances, property prices, job security and business activity.

Darren Yaxley, from YouGov, said: "With the cost-of-living crisis continuing to rumble on, this data suggests that, perhaps unsurprisingly, consumers' household finances are bearing the brunt.

"Other metrics such as house value, job security, and business activity remain stable for the time being, but it remains to be seen whether these will experience a similar freefall as the country continues to feel the squeeze."

Greater anxiety


Kay Neufeld, head of forecasting at CEBR, said the confidence index was in "freefall, as consumer sentiment now stands at the lowest level in 17 months".

She added: "Worryingly, consumers are also becoming less optimistic on the outlook for business activity going forward, which is likely driven by greater anxiety about a potential recession further down the line."

Sarah Pennells, consumer finance specialist at Royal London, said: "Our cost-of-living research shows that people are already cutting back their spending on food, fuel and energy bills, with only one in 10 people saying they weren't planning any cutbacks.

"While those on the lowest incomes will spend a bigger percentage of their income on household expenses, we found that people across all income bands were worried about higher energy bills."

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