- UK consumer confidence is at a two-year low.
- Debt levels are rising across most age groups.
- Unemployment among young people has climbed to its highest since 2020.
Confidence among UK households about their finances appears to be struggling, with new research suggesting spending remains subdued while worries about debt continue to grow. The latest UK consumer confidence data points to a cautious mood, with many households uncertain about their financial future.
A survey by S&P Global found consumer confidence is sitting at its lowest level in two years, as people worry about savings, borrowing and their overall financial outlook. The UK Consumer Sentiment Index, which has been running since 2009, recorded a reading of 44.8 in February. Any score below 50 signals worsening confidence, while anything above that level suggests improvement.
Although the figure edged up slightly from 44.6 in January, it still ranks among the weakest readings seen over the past two years. The findings stand in contrast to recent business surveys, which have pointed to rising optimism among companies since the start of the year following reduced uncertainty after the government’s autumn budget.
Debt worries weigh on households
S&P said consumer pessimism “matches the dismal weather seen so far this year,” reportedly noting that persistent rain has done little to lift spirits, as quoted in a news report. However, economists suggested the issue goes beyond seasonal gloom.
Maryam Baluch, economist at S&P Global Market Intelligence, reportedly said there is more at play than poor weather, pointing to growing concerns around borrowing. She said households are becoming increasingly worried about debt, particularly as a rising need for credit coincides with a sharp drop in loan availability since August 2024, as quoted in a news report.
The survey found households are building up debt at the fastest pace since July. Most age groups recorded increases, except those aged 18 to 34, although the steepest rise was among people aged 18 to 24.
Official figures show unemployment for those aged 18 to 24 has reached its highest level since 2020. Catherine Mann, a member of the Bank of England’s rate-setting committee, reportedly said that successive increases in the minimum wage for younger workers may have “manifested in unemployment”, as quoted in a news report.
The survey was released ahead of official labour market data covering the final three months of 2025. Expectations suggest unemployment could remain around 5.1 per cent, while annual growth in average earnings may slow to about 4.2 per cent, down from 4.5 per cent recorded between September and November.
