Consumer confidence drops to lowest level since spring as food inflation rises

When asked about their expectations for the economy over the next three months, over half (52%) of Brits said they expected it to get worse versus 16% that said they expected an improvement, according to the September figures from the BRC Consumer Sentiment Monitor.

That net score of -36 is the lowest level seen since May and a four-point fall on the -32 seen in August. It nevertheless remains considerably below the low of -48 seen In April as Brits were hit by bill shocks and the initial announcement of Donald Trump’s global tariffs.

ONS figures published yesterday showed that food price inflation had risen for the fifth consecutive month, with an annual increase of 5.1% in grocery prices. Overall CPI inflation in August was 3.8%, the same annual increase as was seen in July.

When asked about expectations for their personal financial situation, the net score of -7 given by UK adults was a slight fall on the -6 from August.

BRC chief executive Helen Dickinson said the figures show what is at stake at this autumn’s Budget. “Inflation is now one of the biggest concerns among the public, with food inflation expected to rise to 6% by the end of the year. All eyes are now firmly locked on the 26 November, and what the Chancellor will announce,” she said.

The chief UK economist at KPMG pointed to the decisions of the government as a reason for why inflation in Britain remains considerably above the rates seen in France and Germany. 

“Since April, the rise in inflation has been driven largely by domestic policy choices, including the increase in employers’ national insurance contributions. These higher costs have been passed on by businesses to consumers, feeding through into higher headline inflation,” said Yael Selfin.

Dickinson said that the latest figures showed a clear generational divide in economic expectations. “Confidence among Millennials fell dramatically this month, as their expectations for both the economy and their own finances fell by double digits. The same generation also cut spending expectations for the months ahead, though this was largely offset by improvements for Gen Z, who remain the most optimistic.”