UK consumer confidence sees sharpest fall in March since pandemic

British consumer sentiment has fallen by 8.2 points in March, marking the most significant monthly decline since the first Covid-19 lockdown, according to data collected by GlobalData.

The fall in consumer confidence is said to be due to households fearing the impact of international conflict more than domestic tax changes. 

News of the research findings came after strikes on Iran by the US and Israel. GlobalData found that shoppers are increasingly concerned about the 21st Century economy. 

Almost half of those surveyed said they expect interest rates to increase this year. This is expected to pressure mortgage holders and first-time buyers.

The findings suggest that uncertainty regarding personal finances will lead consumers to reduce discretionary spending, impacting non-food retailers.

Analysts suggest the initial shock of the conflict may ease, but uncertainty will remain until the war ends.

Shoppers are likely to prioritise essential items, such as groceries and health and beauty products, over the coming months.

Sofie Willmott, associate director of retail at GlobalData, said: “The significant fall in consumer confidence will be a real concern for UK retailers who have faced years of challenges post-Covid and will have been hoping to see consumer sentiment rise in 2026.

“The Middle East war has triggered a change in direction for UK interest rates which will encourage more affluent consumers to continue saving, rather than spending on retail. It will also mean more of consumers’ monthly outgoings will be swallowed up by interest paid on mortgages, as borrowers change deals, once again diverting funds that could be spent on retail products.”

She added: “Weak consumer confidence in 2026 will hinder retail spending and while some level of uncertainty remains, shoppers are likely to focus their buying on essential products like groceries and health & beauty items.”