The British Retail Consortium chief executive has warned of the impact of rising costs, as figures show consumer confidence has fallen almost 40 points since July 2024.

According to new data from the BRC-Opinium Consumer Sentiment Monitor, consumer expectations of the state of the economy over the next three months fell to -37 index points – a drop from -34 in January. It marks the fifth consecutive month in which expectations have worsened.

Expectations of personal consumer spending on retail inched up to -5 in February, down from  -9 in January, while expected personal spending overall and personal savings remained at 4 and 3, respectively.

BRC chief executive Helen Dickinson said optimism had dropped among all consumers, even Gen Z which is often dubbed the most “upbeat generation”.

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Dickinson said: “With many businesses warning of the impact that April’s employer NIC’s increase will have on hiring, and the rising energy price cap pushing up the cost of domestic bills, it is little surprise that many households are worried. And while there was a positive increase in expectations of personal retail spending, this may be largely driven by the expectations of higher prices in the future.

“Expectations of higher prices are not unfounded, with two-thirds of retailers saying prices will have to rise as a result of the £7bn in additional costs, including higher employer NICs and a new packaging levy. Almost half of retailers also warned of hiring freezes, with entry-level jobs often among the first to go as they seek any cost efficiencies to help them protect customers from the worst of the rising costs.”

The chief executive’s comments follow concerns raises by many of the UK’s leading retailers. In recent weeks, supermarket giants have made a series of job cuts aimed at cost cutting measures across their business.

Dickinson added: “As the Government bill on the future of business rates progresses through Parliament, it is essential that no shop ends up paying more in rates as a result of these reforms, otherwise retailers will face a triple whammy of Budget costs, business rates rises, and new packaging and recycling levies, all of which will filter through to consumer prices.”