Consumer sentiment has declined, with expectations for the economy dropping to -37 in February, a worsening trend for five consecutive months. Personal finance confidence also fell, indicating households feel increasingly strained. Despite slight improvements in retail spending expectations, fears of rising prices persist, as retailers anticipate increased costs due to new levies. A notable gender divide in economic confidence revealed women feel more pessimistic. Retailers also warned about hiring freezes to manage rising costs, which could impact entry-level job opportunities. Overall, the outlook is bleak as households prepare for tougher economic times ahead.
People's expectations of the economy reached a new low, having fallen almost 40pts since July 2024. Even Gen Z, the most upbeat generation on the economy, saw a drop off in optimism.
There was a widening gender divide in confidence this month, with women more pessimistic than men about both the economy and their own finances by 13 and 17pts respectively.
The expectations of higher prices are not unfounded, with two-thirds of retailers saying prices will have to rise as a result of the £7bn in additional costs.
Almost half of retailers also warned of hiring freezes, with entry-level jobs often among the first to go.
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