Consumer inflation fears hit three-year high as confidence in UK economy wanes

Alys Key
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Growth in food expenditure slowed slightly during July (Source: Getty)

Consumer anxiety over levels of inflation hit its highest level since 2014 in July, while confidence in the UK's economy was dented.

More than two thirds (65 per cent) of British adults said they were concerned by the levels of inflation, in a survey of 2,000 people conducted by Ipsos MORI for Lloyds Bank. This marks the highest level since January 2014.

The proportion of those who felt negative about the country's financial situation as a whole also increased to 69 per cent.

The figures come even after UK inflation stayed flat at 2.6 per cent in July.

Read more: Inflation is back and shouldn't be ignored

“Despite a slight slowdown in the rate of essential spending growth over the summer, concerns around inflation have continued to build, which has an impact on future intentions," said Robin Bulloch, managing director of Lloyds Bank.

Just one in five people thought they would be saving more in six months time than they were currently, a decrease from 27 per cent in June.

Bulloch added: "With the rate of savings already at a record low, significantly fewer people now expect to be putting more money aside in six months’ time. While the pressure on disposable income makes this understandable, it does mean consumers are less able to absorb any further squeeze on their finances.”

Meanwhile, Lloyds figures showed that year-on-year growth in consumers' essential spend for July was around two per cent, slowing from three per cent in June. Growth in spending on food and fuel both slowed compared to the month before.

Read more: Consumer confidence moves back up but business remains unconvinced

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