New research from consumer watchdog Which? reveals that over half of UK consumers (53%) believe the economy will worsen over the next 12 months, with 2.1 million individuals struggling to meet essential payments amidst the ongoing cost of living crisis.
The latest Consumer Insight Tracker by Which? indicates a notable decline in consumer confidence, marking a net confidence score of -32 for the future of the economy. While 21% expressed optimism about economic improvement, the majority foresee a challenging economic landscape in the coming year.
One woman in her twenties expressed a bleak outlook, stating, “I don’t see the economy improving anytime soon, and we’re barely keeping our head above water.” Another woman in her fifties highlighted the persistent challenges, noting that while inflation may be decreasing, prices are still rising, particularly for essentials like food.
The study indicates a shift in consumer sentiment, with confidence in future household finances dropping to -11. Concerns about rising energy costs without government support, increasing utility bills, and the overall inflationary environment contribute to these apprehensions.
Consumer confidence in the economy closely aligns with household finances, as 79% of those expecting their finances to worsen also with negative views about the future economy. Pessimism about household finances correlates with expectations of increased bills, with 90% anticipating higher fuel costs and 89% expecting elevated food bills.
Financial difficulties persist, with an estimated 2.1 million households missing essential payments in the month to October 9. About 55% of households reported making adjustments to cover essential spending, such as cutting back on essentials, tapping into savings, or borrowing.
As winter approaches and energy bills remain high, Which? emphasises the need for essential businesses—energy firms, broadband providers, and supermarkets—to play a role in easing financial pressures. The watchdog calls on supermarkets to provide affordable, healthy food options, energy firms to bolster customer service support, and telecoms companies to effectively promote social tariffs.
Rocio Concha, Which? Director of Policy and Advocacy, urged businesses to take proactive measures, stating, “With millions struggling to make ends meet during the cost of living crisis, it’s understandable that many consumers continue to be wary about the future of the economy and their finances.” Concha emphasised the importance of businesses providing support and avoiding unnecessary costs for customers facing financial hardship.
