Britons feeling ‘dismal’ about finances amid mounting debts, survey finds | Economics
The mood for UK households about their finances is “gloomy”, according to research which suggests consumer spending remains stagnant and debt is rising.
Consumer confidence in the UK remains at its lowest level in two years questionnaire According to research by S&P Global, households are worried about their debt, future financial prospects and savings.
S&P said consumer pessimism “matches the gloomy weather seen so far this year” and that recent wet weather “has not helped alleviate the demoralization seen among households.”
The UK Consumer Sentiment Index survey, which has been conducted since 2009, reported a result of 44.8 in February. Any reading above 50 indicates an overall improvement in consumer confidence, while anything below indicates a deterioration.
This month’s index reading was up slightly from January’s 44.6, but remained among the weakest figures in the last two years. The S&P report contradicts recent business surveys that suggest optimism has increased among companies since the start of the new year after uncertainty about the government’s autumn budget was lifted.
Maryam Baluch, an economist at S&P Global Market Intelligence, said: “Long periods of rain and lack of sunshine have undoubtedly not helped alleviate the demoralization among households, but there is much more going on here than just bad weather.
“Households are increasingly worried about debt, especially as their growing need for credit is met by the steepest decline in credit availability since August 2024.”
The survey found that households have been accumulating debt at an unprecedented rate since July. Debt growth was recorded in all age groups except those aged 18 to 34, but the highest rate of debt growth was seen among those aged 18 to 24.
According to official figures, the unemployment rate for 18-24 year olds is at its highest level since 2020. Catherine Mann, member of the Bank of England’s interest rate setting committee. he told the Sunday Telegraph He believes that the policy of successive governments to increase the minimum wage for this age group has “manifested as unemployment” for young workers.
The S&P survey comes a day before the final official figures for employment and wages in the UK for the final three months of 2025 are due to be released. Unemployment is expected to remain at 5.1%, while annual growth in average earnings is expected to slow to 4.2% from 4.5% from September to November.
The S&P survey showed households are more pessimistic about their financial prospects for the next 12 months than they were in January. All UK regions and countries recorded declines in their savings and cash holdings; The steepest declines occurred in the East Midlands, Northern Ireland and Yorkshire.
The appetite for big purchases fell to its lowest level in the last 10 months due to lack of confidence in future financing and debt concerns.
Baluch said: “Low appetite for spending bodes ill for a broader momentum towards purchasing and points to a sustained drag on economic growth due to slowing consumer spending in the first quarter.”
