UK Consumer Confidence Plummets to Two-Year Low as Debt Mounts
Consumer confidence in the United Kingdom has hit its lowest point in two years, according to a recent survey by S&P Global, with households describing their financial outlook as "dismal" amid rising debts and persistent bad weather. The UK Consumer Sentiment Index recorded a reading of 44.8 in February, remaining below the 50 threshold that indicates improvement, despite a slight uptick from January's 44.6.
Weather and Economic Pressures Dampen Spirits
Economist Maryam Baluch from S&P Global Market Intelligence noted that the prolonged rain and lack of sunshine have failed to lift household morale, but emphasized that deeper economic issues are at play. "There's more going on here than just bad weather," she stated, highlighting growing concerns over debt accumulation and reduced loan availability since August 2024.
The survey reveals that households are accumulating debt at the fastest rate since July, with the steepest increases observed among 18- to 24-year-olds. This age group also faces the highest unemployment rate since 2020, a trend that Bank of England committee member Catherine Mann attributes to government policies on minimum wage increases.
Regional and Spending Impacts
All regions across the UK reported declines in savings and available cash, with the most significant drops in the East Midlands, Northern Ireland, and Yorkshire. Additionally, the appetite for major purchases has fallen to a 10-month low, driven by financial uncertainty and debt worries.
- Consumer confidence index at 44.8, below the 50 improvement mark.
- Debt accumulation peaks among young adults aged 18-24.
- Unemployment for 18- to 24-year-olds reaches highest level since 2020.
- Big-ticket spending hits lowest point in nearly a year.
Baluch warned that this reluctance to spend could hinder economic growth in the first quarter, signaling a sustained drag from sluggish consumer activity. The findings come ahead of official employment and wage data for late 2025, which is expected to show stable unemployment but slowing earnings growth.
