Staff Reporter

Consumer confidence in the U.K. has dropped to its lowest point in over a year, as households grapple with rising costs and renewed worries over the economic fallout from U.S. trade policies.

The GfK consumer confidence index fell four points to -23 in April, marking the weakest reading since November 2023. This decline reflects pressures from domestic tax hikes, increased household bills, and fears that U.S. tariffs could spark another wave of inflation.

Neil Bellamy, consumer insights director at GfK, noted that consumers are facing “multiple cost increases” this April, including utility bills, council tax, stamp duty, and road tax. He added that consumers are also “hearing alarming warnings of renewed high inflation due to the Trump tariffs.”

The latest round of tariffs from former President Trump has disrupted global markets and heightened the risk of a broader economic slowdown. While the direct inflationary impact outside the U.S. is uncertain, supply chain disruptions could lead to higher prices in the U.K. as well.

GfK’s data reveals that expectations for the economy over the next year have dropped by eight points to -37, significantly worse than the reading from April 2024. The outlook for personal finances also deteriorated, falling four points to -3, which is five points lower than last year.

Declining sentiment often signals caution, leading households to potentially cut back on major purchases as financial uncertainty looms.

Although U.K. inflation has decreased from its late-2022 peak of 11.1% to 2.6%, the Bank of England predicts a temporary rise to 3.7% this summer before easing toward its 2% target over the next two years.

Bellamy warned that the U.K. might be “on the brink of another wave of rapidly rising prices” linked to the repercussions of Trump’s trade policies. “If that happens, consumer confidence could plummet, erasing the gains made since the disastrous September 2022 mini-budget, when confidence hit a record low of -49.”