Consumer confidence hits ‘new low’ in February as energy bills rise looms

Confidence has declined almost 40 points since July last year, the latest BRC-Opinium data showed.

Expectations about the economy over the next three months declined for a fifth consecutive month, reaching -37 versus -34 in January, and people’s expectations about their own financial situation slid from -4 to -11 month-on-month.

However, expectations about personal spending on retail rose from -9 to -5, and on personal spending the overall figure was unchanged at +4.

BRC chief executive Helen Dickinson said: “People’s expectations of the economy reached a new low. Even Gen Z, the most upbeat generation on the economy and their own finances, saw a drop in optimism. There was also a widening gender divide in confidence this month, with women more pessimistic than men about both the economy and their own finances.

“With many businesses warning of the impact that April’s employer national insurance contributions increase will have on hiring, and the rising energy price cap pushing up the cost of domestic bills, it is little surprise that many households are worried.

“While there was a positive increase in expectations of personal retail spending, this may be largely driven by the expectations of higher prices in the future.

“Expectations of higher prices are not unfounded, with two-thirds of retailers saying prices will have to rise as a result of the £7bn in additional costs, including higher employer national insurance contributions and a new packaging levy.

“Almost half of retailers also warned of hiring freezes, with entry-level jobs often among the first to go as they seek any cost efficiencies to help them protect customers from the worst of the rising costs.

“As the government bill on the future of business rates progresses through Parliament, it is essential that no shop ends up paying more in rates as a result of these reforms, otherwise retailers will face a triple whammy of Budget costs, business rates rises, and new packaging and recycling levies, all of which will filter through to consumer prices.”