UK households bracing for new cost of living crisis, report finds

UK consumer confidence has plunged to its lowest level since autumn 2023, with nearly 90% of households concerned about the cost of living amid the economic fallout from the Middle East conflict [1]. PwC's quarterly survey recorded a consumer confidence score of -13 in April, a sharp decline from -1 in January [1]. Almost 80% of the 2,068 consumers surveyed plan to cut spending in the next three months, with the proportion intending to drive less to save on fuel doubling to 24% since January [1]. "Rising costs are prompting shoppers to pull back spend across the board, and it’s expected sentiment will get worse before it gets better, as consumers face higher energy and food costs later in the year," said Sam Waller of PwC UK [1]. The Bank of England has warned that higher inflation is 'unavoidable' due to the conflict, which will push up fuel, food, and energy prices [1]. Official data shows UK inflation, measured by the consumer prices index, rose to 3.3% in March, above the Bank's 2% target [1]. The survey reflects a broader trend, with a separate report from KPMG and the Recruitment and Employment Confederation noting a faster fall in permanent staff appointments in April due to 'heightened market uncertainty' [1]. Job vacancies declined for the 30th successive month, though the pace of reduction was modest, as employers turned more heavily to temporary staff [1].