Consumer confidence in the economy has hit its lowest point since the start of the pandemic as households feel the effects of the cost-of-living crisis, according to the Which? Consumer Insight Tracker.
The latest data from the consumer watchdog reveals that 78% of consumers think the UK economy will decline over the next 12 months, while just 8% believe it will improve.
Net confidence in the future UK economy was minus 70 in June (down from minus 47 in May), while confidence in future household finances also dropped by 12 points to minus 40, in line with lowest point of the pandemic in March 2020.
The figures indicate that households are facing increasing financial difficulties, with more than half (58%) of consumers cutting back on essentials or dipping into savings to cover rising costs over the past month.
Similar numbers were seen in May and April of this year (57% and 59% respectively), a significant jump on the 40% of consumers who were taking such measures this time last year.
The survey has tapped into consumer sentiment surrounding UK inflation’s 40 year high, with the Institute of Grocery Distribution predicting that food inflation will peak at 15% this summer.
READ MORE: Consumer confidence falls as grocery bills continue to rise
The research also found an estimated 2.1 million households missed or defaulted on at least one mortgage, rent, loan, credit card or bill payment in the last month.
Although those on lower incomes are most severely affected by the rising cost of living, the figures suggest that consumers are struggling across all demographics.
Which? has called on businesses to do more to support those struggling to make ends meet.
Rocio Concha, Which? director of policy and advocacy, said: “Our research shows that a relentless cost-of-living crisis is continuing to put huge pressure on household finances – with consumer confidence in the economy plummeting to its lowest point since the pandemic.
“These pressures are especially apparent among the most financially vulnerable – with around two-thirds of those on incomes of £21,000 or lower saying they’ve had to make at least one financial adjustment to cover essentials in the last month.
“The government and businesses must ensure that targeted support reaches the ever-growing number of consumers struggling to make ends meet.”
A survey commissioned by the BBC recently revealed that over half (56%) of Britons are buying fewer groceries or skipping meals altogether.
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