Key findings Q2 2025

1. Consumer confidence falls for the first time since Q3 2022: the Deloitte Consumer Confidence Index fell by -2.6 percentage points to -10.4% in Q2 2025, reaching its lowest level since Q1 2024.
2. Job security worries: sentiment regarding job security decreased significantly (-4.8 percentage points), falling below its long-term average for the first time in two years.
3. Debt concerns: sentiment about debt levels also dropped (-3.7 percentage points), partly due to seasonal factors such as higher utility bills and bookings for summer holidays.
4. Sentiment about economic outlook improves: despite the overall decline in consumer confidence, consumers’ view of the state of the UK economy rose by +4 percentage points.
5. Spending remains subdued: consumers remain cautious about spending making efforts to reduce everyday expenditure to prioritise more discretionary spending such as experiences, particularly travel.
6. The overall picture remains one of cautious consumer sentiment: the continued impact of inflation on food and utilities, coupled with geopolitical uncertainty, suggests that a sustained recovery in consumer confidence may take more time.

After recovering from its lowest level on record in Q3 2022 when inflation peaked at 11.1%, confidence was relatively flat in Q4 2024 and Q1 this year. However, the Deloitte Consumer Confidence Index fell by - 2.6 percentage points to -10.4% in Q2 2025 and is now at its lowest level since Q1 2024 and just above its -10.7% long-term average.

The Deloitte Consumer Confidence Index averages the net percentage improvement in confidence levels over the past three months for six individual measures. The drop in the overall confidence index in Q2 was driven by a fall across all six measures included in the index, but the decline was more significant in sentiments around job security and debt. While the UK labour market remains robust, there are concerns corporates’ demand for labour is weakening due to rises in employer national insurance and minimum wages in April. As a result, consumer sentiment in job security has fallen by -4.8 percentage points to its lowest since Q1 2023 and is now below its long-term average for the first time in two years. At the same time, sentiment about levels of debt dropped by -3.7 percentage points partly due to seasonality with the renewal of some annual utility plans in April often leading to an increase in the costs of household bills. Q2 is also a period when many consumers are booking summer holidays or incur expenditure related to planning activities and entertainment for the summer.

At the same time, the measure of confidence in the UK economy, which is separate from the main index, rose by + 4 percentage points but at -51% remains much lower than the same period a year ago (-32.5%). The improvement in UK growth forecasts, following the recent UK-US trade agreement, has reduced the risk posed by the Trump administration’s import tariffs. Combined with expectations that the Bank of England will lower its base rate to 3.75% over the next 12 months, down from its current rate of 4.25%, have led to improving consumer sentiment about the economic outlook.

Given the mixed outlook, ongoing geopolitical uncertainty and persistent inflation in food and utilities, our data shows consumers remain cautious about spending. Spending on essentials dropped this quarter a sign that consumers have been trying to reduce their everyday expenditure. However, consumers continue to ringfence their budget for experiences especially for spending on travel. Consumers in our survey reported increased levels of discretionary spending driven by a significant rise in spending on clothing and footwear and more spending on holidays compared with both the previous quarter and the same period a year ago. Value seeking behaviours and tactical spending have also become more embedded and combined with consumers’ concerns about the outlook for jobs and unemployment, could mean consumer demand will remain subdued until consumer confidence in the UK’s economic prospects strengthens. Businesses will hope that with the warm weather set to continue, they will see a boost and a return to growth in the coming months.

Net % improvement in confidence in the last three months
Net % spending more in the last three months by category
Source: The Deloitte Consumer Tracker

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Net % improvement in confidence in the last three months
Source: The Deloitte Consumer Tracker

Net % spending more in the last three months by category
Source: The Deloitte Consumer Tracker

Net % spending more in the last three months by category
Source: The Deloitte Consumer Tracker

Net % spending more in the last three months by category
Source: The Deloitte Consumer Tracker