UK Consumer Confidence Weakens Amid Middle East Conflict and Rising Living Costs

British consumer sentiment has dipped slightly compared to three months ago, driven by growing anxiety over grocery and energy prices linked to the ongoing conflict in the Middle East. These findings come from a quarterly survey conducted by global accounting firm KPMG, highlighting deepening financial stress among UK households.

According to the poll, 62% of Britons now believe the economy is deteriorating, a rise from 58% recorded in Q4 2025. Among those with a pessimistic outlook, 85% pointed to rising grocery costs as a primary concern, with 84% citing climbing utility bills and 52% flagging the increased cost of dining out as contributing factors.

The financial strain is also translating into behavioral shifts. Half of those who believe the economy is getting worse have already reduced their day-to-day spending, while 40% are putting off major purchases — a notable jump from the 34% who said the same just three months ago. Meanwhile, the share of consumers describing their financial situation as "insecure" has grown to 25%, up from 22% in the previous quarter.

Linda Ellett, KPMG UK's head of consumer, retail and leisure, noted that the results are unsurprising given the geopolitical climate. She emphasized that real and anticipated impacts on energy and food supply chains are fueling consumer unease about the broader health of the UK economy.

The survey, which polled 3,000 people between March 5 and March 16, paints a cautious picture of the British consumer landscape heading into the next quarter. With household budgets under pressure and confidence fragile, retailers and businesses may need to brace for continued softness in consumer demand as economic uncertainty persists both at home and abroad.