Iran war sparks inflation concerns; UK consumers' confidence hit

MaticHoleFiller · 2026-03-29T16:38:32+00:00

This month, UK consumer confidence has worsened due to concerns over price hikes triggered by the Iran conflict, leading to a decline in economic outlook and personal financial expectations. UK inflation and economic growth are both expected to be revised downward, consumer purchasing willingness has decreased, and savings have increased.

MaticHoleFiller

2026-03-29 16:38:32

Abstract generation in progress

This month, UK consumer sentiment has turned more negative. The Iran war has again reignited concerns about rising prices and intensified doubts about how strong the UK economy really is.

A barometer released by research firm GfK and the Nuremberg Institute for Market Decisions on Friday shows that in March consumer confidence fell by two points to -21, the lowest level since April last year. Economists surveyed by the media had previously expected the reading to be weaker, at -24.

The survey’s indicator measuring consumers’ views on economic prospects fell particularly sharply, while expectations for their personal finances over the next 12 months dipped slightly.

GfK consumer insights director Neil Bellamy said: “People are increasingly worried that prices will rise further significantly over the coming months. Unless the conflict is resolved quickly, or plans such as additional support for government energy bills are put in place, the ripple of fear we see in the March data could turn into a flood.”

He added that respondents’ willingness to buy has fallen and savings have increased, which also indicates that people are tightening their wallets and avoiding big-ticket purchases.

The OECD said on Thursday that, due to the war’s impact, it now expects the UK’s inflation rate in 2026 to average 4%, up from the 2.5% forecast made in December. Among the 20 economies for which it provides projections, the OECD has cut its growth outlook for the UK the most. It now expects the UK’s economic activity to grow by 0.7% this year, down from the previous forecast of 1.2%.

Bellamy of GfK said: “People just feel the economy is not strong enough to ride out the knock-on effects from the Middle East conflict.”

Another set of data released on Friday by the Office for National Statistics showed that retail sales fell by 0.4% month on month in February, due to a decline in supermarket sales. However, some retailers believe consumers may have pulled spending forward to January, when sales rose by 2.0%, to take advantage of post-Christmas discounts during that period.

A massive flow of information and precise analysis—on the Sina Finance app

Byline: Liu Mingliang

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

1 Likes