The proportion of people planning to drive less often to save money on rising fuel costs has doubled from 12% to 24% since January 2026, according to a new survey. The findings come as UK households brace for a fresh cost of living crisis, with the Middle East conflict dampening economic confidence.
Sharp Decline in Consumer Confidence
A quarterly survey from accountancy firm PwC, which tracks spending intentions and financial wellbeing, recorded a score of -13 in April, down sharply from -1 in January. This is the lowest level since autumn 2023 and represents the fastest decline since June 2022, when inflation soared following Russia's invasion of Ukraine.
PwC reported that confidence about household finances has fallen across all age groups. However, young people remain more optimistic than older generations, despite a 20% drop in those under 35 who feel financially healthy and a 9% increase in those struggling with bills.
Widespread Spending Cuts Planned
Nearly 90% of the 2,068 consumers surveyed expressed concern about the cost of living, and almost 80% intend to reduce spending over the next three months. The number of people planning to drive less to save on fuel costs has doubled since January.
“Rising costs are prompting shoppers to pull back spend across the board, and it’s expected sentiment will get worse before it gets better, as consumers face higher energy and food costs later in the year,” said Sam Waller, leader of consumer markets at PwC UK.
Broader Economic Impact
The PwC report aligns with other surveys, including GfK data showing UK consumer confidence slid in April to its lowest since October 2023 due to the economic fallout from the Iran war. Similarly, US consumer confidence hit a record low over higher price concerns.
The Bank of England stated last week that higher inflation in the UK is “unavoidable” because of the Middle East conflict, which will push up fuel, food, and energy prices. Official figures show UK inflation rose to 3.3% in March, up from 3% in February and well above the 2% target.
Business and Employment Concerns
Consumer-facing businesses, such as hospitality, hope the World Cup will provide a boost, while the jet fuel crisis may benefit domestic hotels if staycations rise due to flight cancellations or high costs.
Job worries are also affecting confidence. A separate report from KPMG and the Recruitment and Employment Confederation indicated a faster decline in permanent staff appointments in April, attributed to “heightened market uncertainty amid the war in Iran and rising business costs.” Job vacancies fell for the 30th consecutive month, though the reduction pace was modest. Employers are increasingly relying on temporary workers, with the strongest rise in temporary billings in two-and-a-half years.
