Data: Consumer spending intentions plunge to two-year low
UK consumer confidence has dipped for the second consecutive quarter, with more people now saying they feel worse off – and intend to spend less – than at any point since 2023.
UK consumer confidence has dipped for the second consecutive quarter, with more people now saying they feel worse off – and intend to spend less – than at any point since 2023.
PwC’s spring 2025 data shows consumer sentiment fell from -8 in January to -12 by the end of March — its lowest level since September 2023 and the lowest under the new government.
PwC said the decline was driven by worsening household finances, greater concern over the UK economy, and a rise in short-term spending cutbacks.
The firm found over two-thirds of consumers (70%) now expect to reduce spending in the next three months — the highest proportion in over two years. On average, people plan to cut back in more categories than at the start of the year, from 3.8 to 4.2.
Despite the dip, sentiment remains close to its long-term average. “Things might be worsening slightly, but they’re doing so from higher,” PwC said.
Younger people and families were the most pessimistic, while 25-34 year olds emerged as the most optimistic age group — the only demographic to record an improvement. PwC attributed this to stronger personal finances and tax changes that favoured workers.
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In contrast, retirees — historically the most financially secure group — have seen their household finances fall sharply over the past year.
The data shows consumers are most concerned about the economy, inflation, and global events.
Job security is also a growing worry, particularly among younger and lower-skilled workers affected by National Insurance and National Living Wage changes.
Short-term cutbacks are up across almost all categories, while longer-term spending intentions are returning to pre-Christmas norms. Grocery, holidays, health and home remain top priorities, with grocery the only category to see a clear uplift — driven by continued food inflation and more meals being eaten at home.
Retailers and leisure operators may face challenges as shoppers become more cautious. PwC said: “Consumers now feel worse off, and also intend to spend less money as a result — unlike in late 2024, when people still planned to spend despite growing concern.”
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