UK consumer sentiment suffers first big fall in nearly three years, Deloitte says
Deloitte said its consumer confidence index dropped by 2.60 percentage points to 10.40 per cent in the second quarter, its lowest since the first quarter of 2024.
The fall was the first since the third quarter of 2022 – when inflation hit a double-digit peak and financial markets reeled from former Prime Minister Liz Truss' budget plans – apart from a 0.20 point decline last year which Deloitte did not view as statistically significant.
"Concerns of a slowing labour market have left consumers worried about job security and income growth prospects, while persistent inflation and a high cost of living have negatively impacted sentiment towards personal debt," said Deloitte consumer insight lead Celine Fenech.
Businesses have blamed increased employment taxes and a higher minimum wage which took effect in April, as well as planned law changes to make it harder to dismiss new employees, for making them more reluctant to hire.
Official data last week showed Britain's unemployment rate rose to 4.70 per cent in the three months to May, its highest since 2021, while inflation picked up to 3.60 per cent in June, the highest since January 2024.
The Deloitte figures paint a slightly different picture to Britain's longest-running survey of consumer sentiment, from GfK, which drifted in the second half of last year but rose to its highest since December last month.
Deloitte's survey of 3,200 consumers was conducted between June 13 and June 16, and the consumer sentiment index is based on six questions about job security, job opportunities, income, debt, children's welfare, and general health and wellbeing.
A separate question about the state of the economy saw a 3.90 percentage point rise in its balance, but it was still 18.40 percentage points lower than a year earlier.
"Activity in the UK has slowed in recent months, but an uptick in business confidence seen in the latest Deloitte CFO Survey testifies to continued resilience amid geopolitical uncertainties," Deloitte chief economist Ian Stewart said.
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