Consumer confidence remained flat in the first quarter (Q1) of 2025, according Deloitte‘s latest Consumer Tracker, marking a second consecutive quarter of stalled confidence following a two-year period of improvement.

It said consumer confidence edged up by just +0.3 percentage points, based on responses from its poll of 3,200 UK adults.

Consumers cut back on luxuries in favour of essentials

Confidence towards disposable income fell in Q1, with over three quarters (77%) of those polled by Deloitte saying they had spent more in the last three months due to rising prices. Almost half (47%) of consumers had also cut back their spend to essentials in the last quarter as inflationary pressures persist. A further 54% had consciously cut down on luxuries and treats, as they looked to make spending budgets go further.

“The consumer recovery appears to have stalled despite continued strong wage growth, with uncertainty around the economy and other factors such as geopolitical tensions playing on the minds of consumers,” Celine Fenech, Consumer Insight Lead at Deloitte, commented.

“As inflation persists, particularly on food and utilities, consumers are being more tactical in the way they spend, with a focus on essentials and looking for discounts and promotions when making purchases.”

Celine Fenech, Consumer Insight Lead, Deloitte

Confidence in the UK economy falls to lowest level since Q3 2023

Sentiment towards the state of the UK economy fell by -3.5 percentage points among consumers, rhis representing lowest level since Q3 2023.

“Amid high levels of global uncertainty, a more cautious UK consumer is likely to constrain the ability of businesses to pass on higher wage and other costs to customers,” Ian Stewart, Chief Economist at Deloitte, added. “A revival in consumer spending will be dependent on the jobs market holding up and inflation pressures remaining contained.”