Fears over a sharp erosion in living standards driven by the cost of living crunch is weighing on Brits’ confidence levels, reveals a fresh survey published today.
Consumer confidence in the UK dipped to its lowest level in 11 months last month, according to research by Bank of America.
Concerns over inflation hitting household budgets and leaving consumers with less room to maintain spending levels is intensifying worries about future finances.
Confidence in future personal finances plummeted to the lowest level Bank of America have recorded since they started tracking the data five years ago.
A combination of inflation peaking at 7.25 per cent, a 54 per cent uplift to the energy bill cap and a 1.25 percentage point national insurance hike will reduce Britons’ real take home pay at the worst rate since comparable records began in 1990, according to the Bank of England.
The projected reduction in living standards is prompting economists to redraw their predictions for UK economic growth this year due to an expected drop off in consumer spending.
The Bank revised down its 2022 GDP expansion to 3.75 per cent from five per cent last week.
Inflation is already running at the highest rate in nearly three decades and is expected to rise even further in the coming months.
New GDP figures released by the Office for National Statistics this Friday are expected to reveal the economy contracted in December, driven by Plan B measures hitting output in the services industry.