UK consumer confidence drops to 11-month low in March

Consumer sentiment in the United Kingdom has fallen to its lowest level in nearly a year as households express concern over the economic impact of the conflict involving Iran. According to the latest survey from GfK, the consumer confidence index dropped to -21 in March from -19 in February, marking its weakest reading since April 2025. Neil Bellamy, consumer insights director at GfK, noted that the public is skeptical about the economy's resilience in the face of international instability.

People simply do not feel the economy is robust enough to ride out the knock-on effects from the Middle East conflict.

The survey, which is the longest-running of its kind in Britain, revealed a 6-point decline in how households view the general economic situation over the next 12 months. While personal finance assessments remained stable, the willingness to make major purchases fell by 4 points, and the savings rate rose by 6 points.

Rising costs are a major factor in the decline, with oil prices increasing 50% since the conflict began in late February. Although the British government has provided limited support for households reliant on heating oil, many remain vulnerable to rising energy costs as regulated tariffs are capped until July. The Bank of England expects inflation to rise toward 3.5% by mid-year, while the OECD has revised its UK inflation forecast to an average of 4% for the year.

Household inflation expectations have also reached their highest level since November. This trend is mirrored in data from Citi and YouGov plc, which reported the largest jump in inflation expectations in more than 20 years. Bellamy warned that the current sentiment could worsen without a swift resolution to the conflict or further government support.

Unless there's a swift resolution to the conflict, or government schemes such as additional support with energy bills ... this ripple of fear we are seeing in the March data has the danger of turning into a flood.