UK consumer sentiment worsens in March amid Iran war impact
Expectations of future finances among UK consumers worsened in March as labour market optimism weakened amid the first signs of the war in Iran having an impact, data published by S&P Global showed Monday.
The S&P Global UK consumer sentiment index fell to a 14-month low of 44.1 points in March from 44.8 in February. Falling further away from the neutral 50-point mark separating growth from contraction, it indicates the pace of deterioration in consumer sentiment accelerated in March.
The household finance index declined to 41.5 points in March from 43.7 in February. The index for current finances worsened to 39.0 points in March from 41.2 in February.
Notably, the future index for expected finances in 12 months’ time deteriorated to a 27-month low of 43.9 points in March from 46.1 in February.
The debt sentiment index, however, rose to 49.1 points in March from 48.2 in February.
Meanwhile, the savings index fell to 42.2 points in March from 42.9 in February.
Maryam Baluch, economist at S&P Global Market Intelligence said: ‘A marked deterioration of consumer sentiment in March means we are seeing the first concrete signs of the war in the Middle East damaging the UK economy. Households are again grappling with increasing energy and fuel prices, exacerbating already strained finances.’
She added: ‘Households are consequently now the most downbeat about their financial prospects since December 2023, reporting an increased reluctance to spend and borrow while growing more worried about job security. The war has also caused households to view a further cut in interest rates by the Bank of England as increasingly unlikely in the near?term, further encouraging households to scrutinise their outgoings more closely in an effort to limit their financial burden.’
The consumer sentiment survey is based on monthly responses from about 1,500 individuals in the UK, with data collected by Ipsos MORI from its panel of respondents aged 18 to 64. The responses were collected between March 5 and 9.
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