UK consumer confidence has fallen, with rising concern about household utilities costs a key factor.
The findings come from KPMG UK’s quarterly Consumer Pulse survey, which asked 3000 UK consumers in March about their financial confidence and spending over the last three months.
Confidence in the UK economy fell, with 62% of consumers saying it is worsening (up from 58% the previous quarter). Only one in ten said the economy is improving (10%).
Across all age groups, grocery costs remain the number one reason for (85% of) those saying the economy is worsening, followed closely by utilities cost concern - which jumped nine percentage points (from 75% to 84%) in a quarter.
Utilities cost concern is the number one reason for those aged 25 to 54 to say the economy is worsening.
Half of people (49%) who think the economy is worsening report cutting spending as a consequence, with 40% deferring big ticket purchases (rising from 34% three months ago).
Despite the downbeat opinion about the trajectory of the UK economy, the majority (54%) of the 3000 consumers surveyed reported feeling secure in their financial situation (down from 56%) – while those feeling financially insecure grew slightly (rising three percentage points to 25%).
Reflecting on the findings, Linda Ellett, Head of Consumer, Retail and Leisure for KPMG UK, said: “Considering the backdrop of the ongoing conflict in the Middle East, and the actual and potential impact on energy and grocery prices, it is not a surprise that we are seeing heightened consumer concern about the economic health of the UK.
“While there are relatively healthy signs of day to day spending activity so far this year, a growing number of people say they are deferring larger item spending due to their concern about the economy. The number of people feeling insecure about their financial situation has slightly grown in the last quarter, but the majority of people currently remain secure. That scale of security may be tested in the coming months, depending on how much costs increase by and for how long.”
If people were to be convinced that the economy is improving, a third (28%) say they would increase their discretionary spending, and a quarter (24%) would make more big-ticket purchases.
Price remains the number one purchasing driver for everyday items, rising (to 71%) to a level not seen for a year. Price savvy consumers reported increases in:
•Using loyalty schemes more to access lower prices (up two percentage points from last quarter).
•Buying more value or own brand goods (up three percentage points).
•Buying lower cost brands (up two percentage points).
•Shopping at lower cost retailers (up one percentage point).
Day-to-day spending has remained resilient through the first quarter. Consumers reported spending more on eating out (up seven percentage points) and takeaway (up five percentage points) in Q1 (which included the Christmas period) to the previous quarter.
So far this year, six in ten people say they have eaten out in a restaurant, 39% went out for an alcoholic drink, and just under half (47%) said they had takeaway.
The most common big-ticket spend in the quarter, for a fifth (22%) of those polled, was on a holiday (or booking). But the largest number of consumers (47%) are yet to make a big-ticket purchase in 2026.
Ellett added: “The cautious consumer landscape continues, with essential cost levels and economic concern driving an increased focus on price and promotions. Loyalty scheme use and own brand buying continues to grow.
"Larger discretionary spend is being prioritised toward holidays and experiences, but there are still relatively healthy signs so far this year of day-to-day spending activity – albeit consumer, retail and leisure brands are having to compete in a landscape of squeezed consumer budgets and rising business costs.”