UK consumer confidence decreased for the first time since the third quarter of 2022, with the Deloitte Consumer Confidence Index going down by 2.6% to an overall 10.6% decline.

However, consumer confidence towards the current state of the UK economy increased by 3.9% compared to the last quarter but remains below its comparable figure from a year ago.

The data from Deloitte also revealed that the amount of spending is also in a decline as consumer confidence goes down.

Essential spending went down by 4.6%, driven by the summer weather leading to lower utility bills, but only resulted in a modest 1.5% increase in discretionary spending.

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Céline Fenech, consumer insight lead at Deloitte, said: “For the last few years we have seen consumer confidence remain relatively resilient despite several economic challenges, geopolitical uncertainty, and the increased cost of living.

“After recovering from its lowest level on record in the third quarter of 2022, when inflation peaked to a historic high, our consumer confidence index has declined for the first time in almost three years.”

The news comes on the heels of a report of rising inflation in the UK. In June, overall inflation went up to 3.4% compared to 3.6% in the month prior.

In particular, the food and drink sector saw its inflation rise by 4.5%, which marks the third consecutive month of increase.

Ian Stewart, chief economist at Deloitte, added: “Higher inflation—which is well above levels in the US and EU—coupled with a weaker jobs market is weighing on consumer sentiment.

“The UK is unlikely to see inflation returning to the two percent rate that prevailed last summer until well into 2026, so the UK consumer will have to navigate several months of uncomfortably high inflation.”