Consumer confidence in the UK has fallen sharply following escalating tensions in the Middle East, with rising energy prices driving concern about inflation and economic growth.
New data from the British Retail Consortium shows sentiment has deteriorated significantly. When asked about the economy over the next three months, 64% of respondents expect conditions to worsen, while only 11% anticipate improvement. This results in a net balance of -53%, down from -20% just one month earlier.
The survey, conducted by Opinium between 10 and 13 March, also found growing pessimism around personal finances. The balance fell to -17%, compared with -6 in February, indicating households are becoming more cautious.
The shift follows a surge in energy prices linked to disruption in the Strait of Hormuz and wider regional instability. Petrol prices have already risen, with the RAC reporting a 12p per litre increase in unleaded fuel.
Although inflation held at 3% in February, according to the Office for National Statistics, analysts now expect upward pressure in the months ahead. The Bank of England had previously forecast a return to its 2% target, but recent developments have cast doubt on that outlook and may delay or reverse interest rate cuts.
Chancellor Rachel Reeves confirmed that contingency plans are being prepared, with any support likely to be targeted at vulnerable households rather than applied universally.
Businesses are being encouraged to remain outward-looking despite the uncertainty, as weaker consumer demand begins to weigh on growth expectations.
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