Consumer confidence has fallen to its lowest level since autumn 2023 as shoppers brace for rising living costs, according to new research from PwC.

The firm’s latest consumer sentiment survey recorded an index score of -13 in April, down sharply from -1 at the start of the year.

PwC said the decline marked the fastest quarterly fall in sentiment since June 2022 and reversed the improving trend seen since early last year.

The score is now in line with the long-run average since PwC began tracking sentiment in 2008, with global events, the UK economy and cost-of-living pressures weighing on household spending intentions.

Almost 90 per cent of consumers said they were concerned about the cost of living, making it one of the top worries alongside the UK economy. Some 87 per cent said they were concerned about global events.

The research also found the biggest quarterly fall in perceived household finances since 2022. The number of consumers reporting healthy finances, meaning they had money left at the end of the month for savings or luxuries, fell by seven per cent since January.

Meanwhile, the number of people struggling or in financial trouble rose by four per cent.

Under-35s were among the hardest hit, with a 20 per cent fall in those feeling financially healthy and a nine per cent rise in those struggling or in trouble.

PwC warned that consumers have yet to feel the full supply chain impact of global events, including the conflict in the Middle East, on areas such as energy and food prices.

The findings suggest shoppers are preparing to rein in spending over the coming months. Almost eight in 10 consumers said they planned to make cutbacks in the next three months.

Two-fifths said they expected to simply buy less, while a similar proportion said they would eat out less or trade down to cheaper brands. The number of shoppers planning to drive less doubled from 12 per cent in January to 24 per cent, following higher petrol and diesel prices.

PwC UK leader of industry for consumer markets Sam Waller said: “Rising costs are prompting shoppers to pull back spend across the board, and it’s expected sentiment will get worse before it gets better, as consumers face higher energy and food costs later in the year.

“For businesses, this environment demands agility and resilience. With customers increasingly cost-conscious, responding to their changing needs, optimising supply chains, strengthening logistics, and building flexibility into operations to manage demand volatility and rising input costs will be key to navigating the uncertain months ahead.”

Grocery remains consumers’ top spending priority for the next 12 months, driven by expected inflation. Pet food and pet care was the only other category where more consumers said they planned to increase, rather than decrease, spending.

However, shoppers said they expected to spend less across every other major category, with eating out seeing the biggest negative shift in spending intentions.

PwC UK head of retail Jacqueline Windsor said the drop in sentiment would give retailers “pause for thought”.

“Retailers will need to continue to position on value – ensuring they have a range of products for those who plan to trade down as well as cater for those who are going to protect their spending in areas like fashion, health and beauty,” she said.

PwC UK hospitality and leisure sector lead Rick Jones added that consumers were likely to rein in discretionary spending in the short term, particularly across hospitality, travel and leisure.

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