UK consumers cut spending amid worsening confidence

A KPMG survey conducted among 3,000 British consumers has shown an increase in pessimism regarding the economic situation in the UK. The number of citizens who believe that the economy is moving in the wrong direction has increased by 15 percentage points compared to November last year.

According to the survey results, almost half of the respondents are preparing for a possible worsening of the situation as they are curbing their spending on everyday needs. At the same time, one-third of respondents are building up their savings, while 29% are avoiding large purchases. 

Linda Ellett from KPMG UK has analyzed the situation and noted the increasing tendency of households to save money when planning future expenditures. By slowing down current spending and postponing purchases of major goods, the households are preparing for a possible deterioration of their finances. 

The government is trying to maintain confidence among the population by emphasizing the positive dynamics of real wage growth. However, the official statistics showing the economy shrinking by 0.1% in January only adds to the fears. The Guardian experts expect the Office for Budget Responsibility to downgrade the GDP growth forecast for 2025.