UK consumer confidence suffers biggest drop since 2020 on cost of living

· Finance · United Kingdom

A UK index measuring how people view their finances and economic prospects suffered its largest monthly drop since the onset of Covid in 2020, which the Financial Times attributed to "relentless" cost-of-living pressures. The collapse in sentiment points to a sharp pullback in household confidence that could weigh on consumer spending. In currency markets, the yen was described as on track to gain from US midterm elections and unrest in France, adding to cross-market moves driven by political risk. The data adds to a picture of fragile demand in the UK as households absorb persistent price pressures.

Why it matters：A confidence collapse of this size usually precedes weaker retail and credit demand, and it complicates the Bank of England's calculus as inflation and growth pull in opposite directions.

Key points

  • Largest monthly drop in the index since the onset of Covid in 2020
  • The FT linked the decline to 'relentless' cost-of-living pressures
  • The yen was seen gaining from US midterms and French unrest

Sources (original reporting)

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