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Middle East War Squeezes UK Consumer Confidence
17 Mar
Summary
- Consumer confidence in UK has hit a 14-month low.
- Fuel prices have surged due to Middle East conflict.
- Interest rate cuts are unlikely amid rising inflation.
Consumer sentiment in the UK has reached a 14-month low, with households expressing significant concern about their financial future. This downturn is linked to the ongoing conflict in the Middle East, which is contributing to rising inflation and fuel prices. Standard Life boss Andy Briggs voiced worries about the impact on customers' disposable income should costs continue to climb.
Motorists are already experiencing the squeeze, as petrol and diesel prices have seen a substantial increase, marking their highest levels since November 2023. This rise in fuel costs is attributed to the geopolitical tensions affecting oil markets. The Bank of England has indicated that an interest rate cut is not anticipated in the immediate future, adding to financial pressures.
Experts from S&P Global noted that the deteriorating consumer sentiment indicates the Middle East war's detrimental effect on the UK economy. Households are contending with heightened energy and fuel expenses, worsening already strained finances and contributing to a bleak economic outlook. The UK economy experienced no growth in January, prior to the full impact of the conflict being felt.
