UK consumer sentiment hits lowest level in nearly 3 years - S&P

(Sharecast News) - UK consumer confidence hit its lowest level since July 2023 as household savings come under increasing pressure driven by worries over inflation due to the Iran war, according to a survey published on Monday. The S&P Global UK Consumer Sentiment Index (CSI) edged down to 42.1 in May from 42.3 in April - its third consecutive fall.

Data for May data also indicated that 51% of UK households anticipate a rise in interest rates, compared to only 14% expecting a cut by the Bank of England, pushing the net balance of respondents forecasting a hike up to +37% in May, from +24% in April.

The net balance has now increased for two consecutive months and posted a 31-month high, S&P, noting that the rising cost of living was causing concern over future finances.

"Households across the UK have become increasingly gloomy about their financial situation in May as the war in the Middle East show no signs of ending soon," said Maryam Baluch, economist at S&P Global Market Intelligence.

"Outside of the (Covid) pandemic and Ukraine-related energy price spike, we have not seen households this downbeat since 2012. Inflation worries have firmly taken centre stage."

The survey, which has been collected monthly since 2009, is based on a panel of 1,500 UK households. The headline index is a combination of gauges tracking household financial wellbeing, labour market conditions, household spending, savings and debt with the latest data collected between May 7 - 11.

Reporting by Frank Prenesti for Sharecast.com