(Alliance News) - Consumer sentiment in the UK continued to deteriorate in February, with expectations for the economy reaching their lowest level since July 2024, according to the latest British Retail Consortium-Opinium Consumer Sentiment monitor.
The survey, conducted between February 4 and 7, found that consumer expectations for the economy over the next three months fell to minus 37, down from minus 34 in January. This marks the fifth consecutive month of declining confidence.
Expectations for personal finances also worsened, dropping to minus 11 from minus 4 a month earlier. However, consumers reported a slight improvement in their outlook for retail spending, with expectations rising to minus 5 from minus 9 in January.
BRC Chief Executive Officer Helen Dickinson said: "People's expectations of the economy reached a new low, having fallen almost 40 points since July 2024. Even Gen Z, the most upbeat generation regarding the economy and their own finances, saw a drop in optimism. There was also a widening gender divide, with women more pessimistic than men about both the economy and their finances by 13 and 17 points, respectively."
Dickinson attributed the decline in confidence to concerns over rising costs, including April's planned increase in employer National Insurance contributions and a higher energy price cap. "With many businesses warning of the impact that April's employer NIC's increase will have on hiring, and the rising energy price cap pushing up the cost of domestic bills, it is little surprise that many households are worried," she said.
While spending expectations on retail items improved slightly, Dickinson noted that this may be driven by consumers anticipating further price increases. "Expectations of higher prices are not unfounded, with two-thirds of retailers saying prices will have to rise due to GBP7 billion in additional costs, including higher employer NICs and a new packaging levy," she said.
Additionally, nearly half of retailers surveyed warned of potential hiring freezes, with entry-level jobs at particular risk.
Dickinson urged the UK government to ensure that proposed business rates reforms do not increase costs for retailers, warning that additional expenses could further push up prices for consumers.
By Eva Castanedo, Alliance News reporter
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