Gloomy Brits’ sluggish spending set to drag on economic growth
Brits continued to tighten their pockets in January as economists warned sluggish spend from consumers could trigger a “sustained drag on economic growth“.
S&P Global’s latest Consumer Sentiment Index (CSI) showed a reading of 44.8, indicating further deterioration across household confidence with the figure remaining below the 50.0 mark that indicates neutrality. Whilst it crept up from 44.6 in January, it still sat among the weakest readings over the last two years.
Amid the downturn, appetite for big-ticket spending fell to a 10-month low as households reported a sharp downturn in savings.
“The mood among UK households matches the dismal weather seen so far this year across the country,” said Maryam Balunch, economist at S&P Global Market Intelligence.
“A period of prolonged rain and a dearth of sunshine have no doubt not helped to lift the low spirits seen among households, but there’s more going on here than just bad weather.”
Balunch added the “low appettite to spend bodes ill” for the economic and hinted at a “sustained drag on economic growth from sluggish consumer spending in the first quarter”.
Debt-saddled Brits feel pinch of low growth
The growth warning comes after glum figures rounded off 2025 as a post-Budget rebound from the services sector – which contributes around 80 per cent to GDP – failed to bloom.
Economic growth in the fourth-quarter came in at a sluggish 0.1 per cent, a whisker below expectations of 0.2 per cent.
Crucially, GDP per head – a reflection of individual living standards – contracted by 0.1 per cent for the second consecutive quarter, in a stark sign personal conditions were worsening. This came despite the figure being 0.6 per cent higher than the same quarter a year prior.
Andrew Sentance, a former policymaker at the Bank of England, said the UK was on pace for “the most dismal decade for growth in 100 years”.
S&P also sounded the alarm on the fastest rate of debt accumulation for households since July 2025, with 18-24 year-olds saddled with steepest increase.
This came as Brits expressed a stronger desire for unsecured credit – loans not backed by collateral – but the availability of loans shrank at the sharpest pace in 18 months.
Balunch said households were becoming “increasingly worried” about debt. Every UK region registered a decline in current financial health with the East Midlands recording the steepest reduction, while London reported the softest.