Consumer confidence sees a modest improvement but caution remains

Consumer confidence sees a modest improvement but caution remains

• The Q3 Deloitte Consumer Tracker showed overall consumer confidence rose from -10.4% to -10% after a significant fall in the previous quarter;
• Sentiment regarding job security increased the most, growing 1.2 percentage points compared with Q2;
• Consumers’ confidence in their household disposable income fell by 0.5 percentage points to -28%;
• Sentiment about the state of the UK economy dropped to a two-year low at -64%, reaching levels last seen in the summer of 2023;
• Overall spending in Q3 fell across both essential and discretionary items.

Consumer confidence improved by +0.4 percentage points in the third quarter of 2025, driven by increases across four of the six measures included in the Deloitte Consumer Tracker index. This is based on responses from 3,200 UK consumers aged 18+ between 12 and 14 September 2025.

Improvements in perception of job security (+1.2 percentage points) and career progression (+0.4 percentage points) were key in driving the overall uptick in consumer confidence, albeit these levels remain lower than a year ago, down -3.8 and -4.9 percentage points respectively. Elsewhere, sentiment towards levels of debt (+0.6 percentage points) and general health and wellbeing (+0.6 percentage points) also contributed to the general uplift in confidence.

Céline Fenech, consumer insight lead at Deloitte UK, said: “While it is encouraging to see an improvement in consumer confidence this quarter, the overall picture is varied. Caution remains, with many sentiment markers scoring lower than the same time last year. However, with four of the six measures included in our index improving this quarter, there are signs that consumers are feeling more positive about their own circumstances.

“A sustained recovery in confidence may take time, as consumers will be keeping a close eye on inflation levels, particularly the price of essentials, as well as the overall economic outlook.”

Spending falls as consumers feel less confident about their disposable income

Consumer sentiment towards their levels of household disposable income dropped -0.5 percentage points in Q3 2025 and has fallen -5.7 percentage points year-on-year. At the same time, consumer spending fell across both essential (-0.4 percentage points) and discretionary (-0.6 percentage points) items.

Spending on essentials in Q3 was +1.1 percentage points higher than it was a year ago, driven by increases in utility bills (+6.5 percentage points), groceries (+5.6 percentage points) and everyday household items (+5.3 percentage points).

Discretionary spending is also lower (-1.3 percentage points) comparatively year-on-year, with spending on restaurants (-5 percentage points), holidays and hotels (-2.6 percentage points) and purchases of clothing and footwear (-1.8 percentage points) down.

The data shows an increase in the proportion of consumers saying they are spending more because of rising prices (+2 percentage points to 75%) and those saying they are only spending on essentials (+3 percentage points to 47%).

Oliver Vernon-Harcourt, head of retail at Deloitte UK, said: “As inflation persists, particularly across food items, it is understandable that some consumers are feeling less optimistic about their levels of disposable income. As a result, consumers continue to adopt tactical spending behaviours, trading down to cheaper alternatives or opting out of purchases all together. With the ‘Golden Quarter’ now in full swing, the question remains whether consumer spending will pick up to paint a more positive picture for Q4.”

Consumer sentiment towards economy reaches two-year low

Consumer sentiment towards the state of the UK economy fell to a two-year low in Q3 2025, declining -12.9 percentage points on the previous quarter and -26.1 percentage points on Q3 2024.

Ian Stewart, chief economist at Deloitte UK, said: “Higher inflation and economic uncertainty are weighing on consumer sentiment. An easing of inflation next year and further interest rate cuts offer the best prospects of reviving consumer spirits."

-ENDS-

About the research

The Deloitte Consumer Tracker is based on a consumer survey carried out by independent market research agency, YouGov, on Deloitte’s behalf. This survey was conducted online with a nationally representative sample of 3,200 consumers in the UK aged 18+ between 12 and 14 September 2025.   

Overall consumer confidence is calculated as an aggregate of six individual measures: job security, job opportunities, household disposable income, level of debt, children’s education and welfare, general health and wellbeing. Since Q3 2019, respondents have been asked their view on the state of the UK economy.  

The Deloitte Consumer Tracker began in Q3 2011.