UK consumers still reluctant to spend going into 2026, KPMG survey finds

"A study by the accountancy multinational KPMG found that concerns about the health of the UK economy were holding consumers back from spending, especially on eating out and big ticket items such as cars and furniture. The firm said its latest consumer pulse survey, which asked 3,000 people about their spending in the fourth quarter of 2025 and their intentions for the first three months of 2026, showed a combination of concern about the economy and household cost pressures would continue to limit overall spending."

"Entering 2026, the majority of people (56%) feel secure in their personal finances falling by only 1% from 57% when 2025 began, the report said. But concern about the health of the UK economy grew during 2025, starting the year with 43% saying that the economy is worsening and ending the year at 58%. Inflation, as measured by the consumer prices index (CPI), slowed to 3.2% in November, down from 3.8% in September."

"Opposition parties have accused Rachel Reeves of increasing uncertainty and dampening consumer confidence by delaying the budget to November. The chancellor came under fire for a series of leaks and Treasury briefings that triggered speculation about extra taxes, threatening the wealth and incomes of higher earners and retirees. KPMG said respondents to its survey aged 65 or over were the most likely to be pessimistic about the health of the economy."

KPMG's consumer pulse survey of 3,000 people found that worries about the UK economy and household cost pressures are limiting spending, particularly on eating out and big-ticket items like cars and furniture. Consumers continue to cope with high food and energy costs after years of soaring inflation, leaving little appetite for discretionary purchases. Entering 2026, 56% of people feel secure in their personal finances, a 1% decline from January 2025, while concern that the economy is worsening rose from 43% to 58% during 2025. CPI inflation slowed to 3.2% in November, but cumulative CPI rose 23% between January 2021 and May 2024. Respondents aged 65 or over were most pessimistic and inclined to curb spending.

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