Consumer confidence in the UK economy fell during the last quarter, reaching the lowest point so far this year, according to KPMG’s latest Consumer Pulse survey.
KPMG’s poll of 3000 UK consumers saw the number of people feeling that the economy is worsening increase from 51% to 62% in the last three months – and up from 43% since 2025 began.
Impact of economic concern
As has been the case throughout 2025, the majority (58%) of consumers continue to feel financially secure, with no change since the last quarter. But due to a perception that the UK economy is worsening, consumers say they are reducing or deferring spending. Of those who agreed that the UK economy is worsening:
- 56% say they are cutting spend on everyday items (up from 51% last quarter).
- 38% are deferring big ticket purchases (up from 35% last quarter).
- And 38% are saving more as a contingency (up from 36% last quarter).
The cost of groceries is the most common reason (81%, up from 79% last quarter) to feel that the economy is worsening, followed by utilities cost (77%, up from 74% last quarter).
Four in ten (39%) of those saying the economy is worsening say so on the basis of media or social media content that they consume, while a fifth (21%) are influenced by what family and friends tell them.
Responding to the findings, Linda Ellett, Head of Consumer, Retail and Leisure for KPMG UK, said: “Rising food inflation and news of higher energy bills this autumn are two likely factors in the increase in consumer pessimism about the UK economy over the last quarter. Despite the majority of households feeling secure in their current ability to manage their household budget, concern about what a worsening economy will or could mean is leading consumers to say they are cutting, altering or deferring spending. As the Budget approaches, the government need to convince more households that the economy is heading in the right direction.
“Larger purchases are more considered than everyday spend for the majority of people, but there is often money there for the right occasion, product or deal – as demonstrated by holiday spending or household goods buying this summer. Retailers will be focussing on how they entice cautious consumers to spend during the final promotional and festive months of 2025.”
Quarterly spending
Evidence of targeted big ticket spending over the last three months is highlighted in the survey, with one third (29%) of respondents saying they spent on a holiday during the period.
Sales of home goods have been seeing steady monthly increases since the spike in property transactions ahead of the Stamp Duty changes in April, with the last three months seeing 15% of consumers saying they bought a home electrical appliance, 14% spending on minor home improvements, and one in ten buying furniture.
As has been the case in previous Consumer Pulse surveys this year, eating out (40%) and takeaway (34%) are the most common things people report spending less on this quarter compared to last.
Buying behaviour
Consumer focus on price was again evident during the last quarter, with price the number one buying driver for 68% of consumers and a quarter of respondents saying they had used loyalty cards more and a quarter also reporting buying more promotional or discounted goods.
Linda Ellett added: “As food inflation, higher employment costs, and other supply challenges filter their way through to costs of food and drink - in both groceries and eating out, consumers tell us that they are adapting their behaviour to manage these higher costs. Groups of consumers are cutting back on the frequency or total spend of eating out, making product switches when grocery shopping, or maximising loyalty card prices. Cost continues to influence buying behaviour and price is the main purchasing driver for 68% of people when buying everyday items.”
-ENDS-
Q3 2025 Consumer Pulse:
The latest Consumer Pulse survey tracks Q3 during June/July/August vs Q2 during March/April/May 2025.
One Poll, a member of the British Polling Council, surveyed 3000 UK consumers online between September 15 and 22 for KPMG UK. The questions posed were as follows. Questions posed to 3000 unless stated otherwise.
Thinking about your monthly essential costs (i.e. mortgage/rent, utilities, fuel, food, medicine, etc.) and your remaining discretionary spending budget (including savings), how secure or insecure do you currently feel about your financial security?
- 58% Secure
- 19%: Neither secure nor insecure
- 21% Insecure
- 2%: Prefer not to say
Which, if any, of the following best describes your current financial situation? [Select best match]
- 15%: Confident - I am able to spend freely each month on whatever you choose
- 30%: Comfortable - I able to spend freely each month, but have to plan larger purchases
- 28%: Managing - I budget discretionary spending each month
- 19%: Impacted – I am having to limit or cut discretionary spend to pay for essential costs
- 4%: Troubled – I am unable to pay essential bills or incurring debt in order to do so
- Prefer not to say: 2%
Do you think the health of the UK economy of currently improving or worsening?
- 62%: Worsening
- 19%: Staying the same
- 13%: Improving
- Not sure: 6%
To 1850 selecting ‘worsening’: What is currently making you feel that the UK economy is worsening? [Select all that apply]
- 81%: The cost of groceries.
- 77%: The cost of household utilities
- 45%: Your general perception based upon the state of public services where you live
- 39%: Your general perception based upon what you read/hear in media/social media
- 21%: Your general perception based upon what friends and family tell you
- 19%: Your rent or mortgage cost has recently risen
- 17% You thought interest rates would fall by more than they currently have
- 11%: Your job feels more at risk
- 11%: You’re finding it harder to secure work / business
- 6%: Your fixed-term mortgage deal ends (in the second half of 2025) and a new deal will cost more
- 4%: Other
- Not sure: 1%.
To 1850 selecting ‘worsening’: Which, if any, of the following is your perception about the current health of the UK economy making you do? [Select all that apply]
- 56%: Reduce monthly spending on everyday items
- 38%: Save more as a contingency
- 38%: Defer making big ticket purchases
- 19%: Be less inclined to leave your current employment
- 16%: None of the above
Comparing your monthly discretionary spending over the past three months (June, July, Aug) to the three months previous (March, April, May), which, if any, of the following have you been spending LESS or MORE on? [Select all that apply]
- Eating out: Less 40% / More 9%
- Takeaway food: Less 34% / More 7%
- Clothes & footwear: Less 33% / More 9%
- Drinking out: Less 29% / More %
- Live entertainment (e.g. cinema, gig, theatre tickets): Less 24% / More 7%
- Groceries: Less 22% / More 33%
- Beauty products (e.g. make-up): Less 18% / More 6%
- Beauty services (e.g. pedicure): Less 15% / More 4%
- Recreational (non-commuting) vehicle / public transport use: Less 12% / More 7%
- TV (Satellite, cable, streaming) or Music services: Less 13% / More 9%
- Gym or fitness classes: Less 11% / More 7%
- Health services (e.g. massage): Less 11% / More 7%
- Health products (e.g. vitamins or protein powder): Less 12% / More 10%
- Mobile phone contract: Less 9% / More 7%
- Children’s clothing and accessories: Less 8% / More 9%
- Pet food and products: Less 7% / More 10%
- None of the above: Less 25% / More 38%
- Prefer not to say: Less 2% / More 3%
Comparing when you were shopping over the past three months (June, July, Aug)) to the three months previous (March, April, May), which, if any, of the following did you do LESS or MORE of? [Select all that apply]
- Buying full-price branded produce: Less 21% / More 6%
- Shopping online: Less 21% / More 13%
- Shopping in-store: Less 14% / More 14%
- Using credit card(s) when making purchases: Less 13% / More 12%
- Buying own brand / value products: Less 12% / More 24%
- Using buy now pay later when making purchase: Less 10% / More 9%
- Using retailer loyalty schemes to get lower prices: Less 9% / More 24%
- Buying lower-cost branded produce: Less 9% / More 20%
- Buying promotional or discounted items: Less 9% / More 25%
- Shopping at a lower-cost retailer: Less 8% / More 22%
- Buying pre-owned goods: Less 9% / More 14%
- Buying products/services due to their sustainable or ethical credentials: Less 9%/More 7%
- None of the above: Less 33% / More 27%
In the past three months which, if any, of the following ‘big ticket’ items have you spent money on? [Select all that apply]
- 29%: Holiday(s)
- 15%: Home appliances (e.g. fridge or washing machine)
- 14%: Minor home improvements (e.g. painting of one room)
- 14%: Personal technology (e.g. a computer or smart watch)
- 13%: Mobile phone
- 11%: Home electronics (e.g. TV or sound system)
- 10%: Furniture (e.g. a sofa or dining table)
- 10%: Major improvements (e.g. extension or wide-scale redecorating) to your current home
- 7%: A used car
- 6%: A brand-new car
- 5%: Moved home
- None of the above: 36%
In the next three months which, if any, of the following ‘big ticket’ items do you plan to spend money on? [Select all that apply]
- 26%: Holiday(s)
- 17%: Minor home improvements (e.g. painting of one room)
- 12%: Major improvements (e.g. extension or wide-scale redecorating) to your current home
- 11%: Personal technology (e.g. a computer or smart watch)
- 11%: Furniture (e.g. a sofa or dining table)
- 11%: Mobile phone
- 10%: Home appliances (e.g. fridge or washing machine)
- 9%: Home electronics (e.g. TV or sound system)
- 6%: A brand-new car
- 5%: Moving home
- 5%: A used car
- None of the above: 40%
Over the past three months, which, if any, of the following have been your top purchasing drivers when buying everyday items? [Select up to three]
- 68%: Price
- 52%: Quality
- 31%: Convenience
- 23%: Loyalty benefits
- 13%: Health benefits
- 11%: Customer experience
- 10%: Environmental sustainability
- 7%: Data privacy
- 3%: Other ethical considerations
- None of the above: 3%
- Don’t know / None in particular: 7%
Over the past three months, which, if any, of the following have been your top purchasing drivers when buying one-off larger purchases? [Select up to three]
- 58%: Price
- 47%: Quality
- 20%: Convenience
- 14%: Customer experience
- 13%: Loyalty benefits
- 10%: Health benefits
- 9%: Environmental sustainability
- 7%: Data privacy
- 2%: Other ethical considerations
- None of the above: 10%
- Don’t know/ None in particular: 13%
The previous quarter’s Consumer Pulse press release can be found here.
For media enquiries, please contact:
Steven Reilly-Hii,
Media Relations Manager (Consumer and Retail), KPMG UK,
steven.reilly-hii@kpmg.co.uk
About KPMG:
KPMG LLP, a UK limited liability partnership, operates across the UK with approximately 17,000 partners and staff. The UK firm recorded a revenue of £2.99 billion in the year ended 30 September 2024.
KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 143 countries and territories with more than 275,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.