The UK is becoming increasingly worried about higher prices (Yui Mok/PA)
(Picture: PA Wire)More than half of consumers have fears about their disposable income while more than 80% identify this as a result of higher prices on necessities including accommodation, food and energy.
The rising cost of living has forced UK consumer confidence to a record low of minus 19% in global auditing firm Deloitte’s latest Consumer Tracker data released today.
Individuals surveyed were most pessimistic about their household disposable income, with sentiment dropping to minus 55% this quarter.
In addition, 62% of consumers said they are now spending more, compared to less than half (49%) this time last year.
Of these, more than eight out of ten (86%) said their increased spend is specifically due to higher prices.
The survey was based on responses from 3,031 UK consumers between 17 and 21 June this year and was conducted in the immediate days following the UK’s interest rate rise to 1.25%.
Céline Fenech, consumer insight lead at Deloitte, said: “With inflation going up faster than average earnings, there are now more consumers feeling the cost-of-living pinch than not. In a sign of the times, the biggest jump in spend this quarter is on energy and housing costs, including rent and mortgages.
“The current situation means consumers are significantly changing their spending behaviours to adapt. This might be by simply buying less, switching to cheaper brands or stores, and postponing major purchases.”
Compared to the previous quarter, Deloitte’s spending sentiment data fell across both day-to-day and non-essential items - by two and five percentage points, respectively - indicating that consumers are cutting their overall expenditure.
Fenech, added: “With consumer spending equating for half to two-thirds of all economic activity, this could signal major headwinds for the UK economy.”
