Chart: Consumers brace for price rises as appetite for major purchases drops

This puts confidence at its lowest level since ‘Awful April’ 2025. In that month, many different consumer bills went up as US president Donald Trump announced his ‘Liberation Day’ tariffs. 

Trump’s decision to attack Iran has coincided with the public view of the economic situation of the country for the next 12 months dropping back down to -37.

Most concerning for retailers, the Major Purchase Index, which measures whether consumers think now is the right time to make major purchases, has dropped four points down to -18. Conversely, the Savings Index has increased by six points

“Last month the number of people that said prices are going to rise sharply was 28%, now it’s up to 38%,” says Neil Bellamy, consumer insights director at GfK, an NIQ Company

“Whilst  the overall index hasn’t fallen by that much, there’s clearly worries about the economy overall and what is going to happen.”

Bellamy adds that the polling was completed on March 16, with the price of unleaded petrol having risen by a further 8p since then. “It could be even worse next month if that kind of thing continues.

Respondents to a separate consumer confidence tracker from the BRC and polling firm Opinium released earlier this week had a much more gloomy view of the economy. The majority of UK adults, 64%, said they expected the UK economy to get worse over the next three months while just 11% said they thought it would get better.

The resulting net score of -53, the BRC said, was the lowest since it started collecting data in March 2024. Also hitting a new low of -17 was consumer expectations for their personal finances over the next few months.

“Just as the economy was beginning to turn a corner on inflation, the rise in global energy prices is particularly unwelcome for businesses and families. It is now vitally important that government policy does not exacerbate the situation, and bringing down the cost of living must be a top priority,” said BRC chief executive Helen Dickinson.

The Consumer Prices Index (CPI) measure of inflation held steady at 3% in February for the second month in a row. However, a number of analysts said they expect it to accelerate as increased fuel costs and other impacts of the disruption start being reflected in the figures.

Announcing its results yesterday, Next said it was expecting a £15m hit on costs arising from the conflict, but this was based on the assumption that the disruption would last for three months. 

“If the conflict persists, the costs are likely to be reflected in higher prices to consumers and disruption to our supply chain, both of which are likely to suppress sales,” the retailer said in a statement released alongside its results.