Consumer confidence in the UK economy fell during the last quarter to its lowest point so far this year, according to a survey.
KPMG’s latest Consumer Pulse survey of 3,000 UK consumers saw the number of people feeling that the economy is worsening increase from 51% to 62% in the last three months – up from 43% since 2025 began.
The majority of consumers (58%) continue to feel financially secure, with no change since the last quarter.
However, because of a perception that the UK economy is worsening, consumers say they are reducing or deferring spending, the survey found.
Of those who agreed that the UK economy was worsening, 56% said they were cutting spending on everyday items, up from 51% last quarter.
The cost of groceries was the most common reason to feel that the economy was worsening, at 81%, up from 79% last quarter, followed by the cost of utilities, at 77%, up from 74% last quarter.
Linda Ellett, head of consumer, retail and leisure at KPMG UK, said: “Rising food inflation and news of higher energy bills this autumn are two likely factors in the increase in consumer pessimism about the UK economy over the last quarter.
“Despite the majority of households feeling secure in their current ability to manage their household budget, concern about what a worsening economy will or could mean is leading consumers to say they are cutting, altering or deferring spending.
“As the Budget approaches, the Government need to convince more households that the economy is heading in the right direction.”
As has been the case in previous Consumer Pulse surveys this year, eating out (40%) and takeaways (34%) were the most common things people report spending less on this quarter compared to last.
Ms Ellett added: “As food inflation, higher employment costs, and other supply challenges filter their way through to costs of food and drink – in both groceries and eating out – consumers tell us that they are adapting their behaviour to manage these higher costs.
“Groups of consumers are cutting back on the frequency or total spend of eating out, making product switches when grocery shopping, or maximising loyalty card prices.”
