UK Consumer Confidence Suffers Steepest Drop Since 2022 Amid Job Fears

UK consumer confidence saw its sharpest decline in nearly three years, according to Deloitte's latest survey, highlighting growing concerns about job security and income prospects. The firm’s consumer sentiment index fell by 2.6 percentage points to 10.4% in Q2 2025, its lowest since early 2024 and the first significant drop since Q3 2022, when inflation peaked and markets reacted to then-PM Liz Truss' budget.

Deloitte’s survey, conducted from June 13 to 16 among 3,200 respondents, revealed rising anxiety about employment amid a slowing labour market. British businesses have cited rising employment taxes, a higher minimum wage introduced in April, and proposed labour law reforms—such as tougher dismissal rules—as reasons for reduced hiring activity.

The job market outlook continues to dim. Official data shows the UK unemployment rate rose to 4.7% in the three months to May, the highest since 2021. Inflation also increased to 3.6% in June, its highest since January 2024, further straining household finances.

“Concerns of a slowing labour market have left consumers worried about job security and income growth prospects,” said Deloitte’s consumer insight lead Celine Fenech. She noted that persistent inflation and high living costs have also dampened sentiment regarding personal debt.

Interestingly, while sentiment on personal well-being declined, views on the broader economy slightly improved, with a 3.9-point rise in that metric. However, it remains nearly 18.4 points below year-ago levels, reflecting lingering economic uncertainty.

In contrast, GfK’s long-running sentiment index showed rising optimism, hitting its highest since December. Deloitte’s chief economist Ian Stewart acknowledged that while activity has slowed, rising business confidence indicates resilience despite global uncertainties.

This decline in UK consumer confidence underscores growing economic fragility, fueled by job insecurity and inflation pressures.