Consumer confidence in the economy has plunged to its lowest point since the start of the pandemic as Sainsbury’s top boss warned the worst was yet to come.
According to Which? research published today, only eight per cent of consumers felt the UK economy would improve over the next 12 months.
However, nearly eight in 10 (78 per cent) thought it would worsen, resulting in a net confidence of -70 compared to -47 in May.
Confidence in future household finances also dropped to the same level as in March 2020.
Pressure on budgets is increasing amid hiked energy, fuel and grocery bills, with inflation surpassing nine per cent last month.
Six in 10 said their household had been forced to either cut back on essentials or dip into savings, to cover spiralling costs in the past month.
Yesterday, Sainsbury’s Simon Roberts warned rising pressure on household budgets would “only intensify over the remainder of the year”.
In a trading update, the grocer revealed like-for-like sales, excluding fuel, declined by four per cent over the 16 weeks to 25 June, compared with the same period last year.
It would inject £500m into keeping prices low, especially with popular products, as millions of households face financial turmoil, Roberts said.
Which?’s survey was also echoed by fresh data from PwC, which placed consumer sentiment lower than the start of the first lockdown but higher than amid the 2008 financial crisis.
Over 65s and 55-64 year olds were those with the lowest sentiment while 18-24 year olds were slightly more protected from living with parents or less responsibility with paying bills.
There were notable financial worries from “groups who until recently showed resilience and optimism, such as the professional classes,” Lisa Hooker, industry leader for consumer markets at PwC UK, said.
“This demonstrates just how far-reaching the impact of the cost of living crisis is proving to be,” she said.
Hooker echoed retailers’ warnings and said that “things will get worse before they get better,” with further energy cost increases to come this autumn.