Consumer confidence in the United Kingdom’s economy declined during the last quarter, reaching the lowest point so far in 2025, according to KPMG’s Consumer Pulse survey.
KPMG’s poll of 3000 UK-based consumers saw the number of people feeling that the economy is worsening increase significantly from around 51% to 62% in the past 3 months and up from 43% since the current year started.
As has been the case throughout this year, the majority of consumers continue to feel financially secure, with no reported change since the past quarter.
However, due to a perception that the UK economy seems to be getting worse, consumers say they are now “reducing or deferring spending.”
Of those who agreed that the UK economy is worsening:
- 56% say they are cutting spend on everyday items (up from 51% last quarter).
- 38% are deferring big ticket purchases (up from 35% last quarter).
- And 38% are saving more as a contingency (up from 36% last quarter).
The cost of purchasing groceries is said to be the most common reason (81%, up from 79% last quarter) to “feel that the economy is worsening, followed by utilities cost (77%, up from 74% last quarter).”
Four in ten (39%) of those saying the economy is “worsening say so on the basis of media or social media content that they consume, while a fifth (21%) are influenced by what family and friends tell them.”
Linda Ellett, Head of Consumer, Retail and Leisure for KPMG UK, said:
“Rising food inflation and news of higher energy bills this autumn are two likely factors in the increase in consumer pessimism about the UK economy over the last quarter. Despite the majority of households feeling secure in their current ability to manage their household budget, concern about what a worsening economy will or could mean is leading consumers to say they are cutting, altering or deferring spending. As the Budget approaches, the government need to convince more households that the economy is heading in the right direction.
Linda Ellett added:
“As food inflation, higher employment costs, and other supply challenges filter their way through to costs of food and drink – in both groceries and eating out, consumers tell us that they are adapting their behaviour to manage these higher costs.”
Groups of consumers are cutting back on the “frequency or total spend of eating out, making product switches when grocery shopping, or maximising loyalty card prices.”
Cost continues to influence buying behavior and price is “the main purchasing driver for 68% of people when buying everyday items.”
The Consumer Pulse survey tracks Q3 during June/July/August vs Q2 during March/April/May 2025.
One Poll, a member of the British Polling Council, surveyed 3000 UK consumers online between the dates of September 15 and 22 for KPMG UK.