Confidence in the British economy has plunged to a record low as shoppers brace for the impact of Donald Trump’s trade wars.
According to the latest British Retail Consortium (BRC) figures, consumers’ expectations for the economy’s state fell heavily in April.
Helen Dickinson, the chief executive of the BRC, said: “With fieldwork completed just days after Donald Trump’s ‘liberation day’ tariffs, it is unsurprising that consumer expectations for the economy plummeted to a record low.
“The original tariff schedule, since reduced for most countries, was expected to reduce growth in the UK and elsewhere. Even with a pause on many of the US tariffs, business and consumer confidence remain fragile.”
Adding to the pressures are fears over the impact of Labour’s October Budget, which heaped extra costs on employers by increasing their National Insurance contributions (NICS) and lowering the threshold at which they are paid.
Ms Dickinson added: “The risk of higher global prices is an unwanted addition to the £7bn in new costs hitting retailers this year from higher employer National Insurance, increased national living wage, and a new packaging tax.”
Consumers’ expectations on the state of the economy sank from -35 to -48, while the outlook for their personal finances dropped too, falling from -10 in March to -16.
Personal savings rose from -5 to -4. Personal spending on retail rose from 0 in March to +3.
Ms Dickinson said expectations of retail spending were up thanks to the prospect of Easter drawing closer.
“Unsurprisingly, expected spending on groceries saw the largest increase, with over 4 in 10 expecting to spend more in the coming months, rising to half of the over 55s.
“Meanwhile, Gen Z planned to take advantage of the improving weather, with rising spending expectations for eating out and health & beauty products.”
