British consumer morale has dropped significantly, hitting its lowest point since October 2023, as worries over rising prices and the ongoing Iran war take their toll. According to the latest survey from GfK, the UK’s longest-running consumer confidence index, the mood among UK households has soured, reflecting growing concerns about economic stability.
Impact of the Iran War on Consumer Sentiment
In April, GfK’s consumer confidence index fell to -25 from -21 in March, marking the sharpest decline since Britain entered a short recession in the second half of 2023. The survey revealed that all major components of consumer confidence, including personal financial outlooks and economic sentiment, fell. The only exception was the index for major purchases, which remained flat.
The survey results are a direct reflection of the economic strain caused by rising prices, particularly at fuel stations. Neil Bellamy, GfK’s consumer insights director, explained to the media that the surge in fuel prices is hitting household budgets hard, with consumers bracing for further price hikes. “Everyone is grappling with rapid price rises, especially at the fuel pumps,” he said.
A Record-Low Economic Outlook
The findings align with an Ipsos survey published the previous day, which showed that economic optimism in the UK has hit its lowest level since records began in 1978. This dramatic shift reflects the growing uncertainty in the wake of the Iran war, which has disrupted global markets and fuel supplies, contributing to the rising cost of living in the UK.
GfK’s survey also highlighted that a staggering 85% of British consumers expect prices to rise in the next 12 months, up from 79% in March. This is the highest percentage since November 2022, when inflation was in double digits.
Inflation Fears and Rising Prices
Two other surveys released earlier this month highlighted ongoing inflation pressures, particularly in the business sector. Companies are reporting record increases in prices, further contributing to the feeling that the UK’s economic situation is becoming increasingly volatile.
As inflation continues to affect both consumers and businesses, it’s clear that the pressure on household budgets is unlikely to ease anytime soon.
Consumers Preparing for Uncertainty
Interestingly, GfK’s savings index rose to its highest level since July 2025, a sign that many consumers are becoming more cautious. Bellamy noted that the rise in savings often signals concern about the future, as people try to build contingency funds in anticipation of tougher times ahead.
