UK consumers are reluctant to spend going into 2026 despite feeling almost as secure about their personal finances as they did at the beginning of the year, according to research.<\/p>\n
A study by the accountancy multinational KPMG<\/a> found that concerns about the health of the UK economy were holding consumers back from spending, especially on eating out and big ticket items such as cars and furniture.<\/p>\n The firm said its latest consumer pulse survey, which asked 3,000 people about their spending in the fourth quarter of 2025 and their intentions for the first three months of 2026, showed \u201ca combination of concern about the economy and household cost pressures\u201d would continue to limit overall spending.<\/p>\n Consumers said they were still coping with the high cost of food and energy after several years of soaring inflation. The survey found they had little appetite for spending on discretionary items.<\/p>\n \u201cEntering 2026, the majority of people (56%) feel secure in their personal finances \u2013 falling by only 1% from 57% when 2025 began,\u201d the report said. \u201cBut concern about the health of the UK economy grew during 2025, starting the year with 43% saying that the economy is worsening and ending the year at 58%.\u201d<\/p>\n Inflation, as measured by the consumer prices index (CPI), slowed to 3.2% in November<\/a>, down from 3.8% in September. However, in the peak inflationary period<\/a> between January 2021 and May 2024, the cumulative increase in the CPI was 23%.<\/p>\n Opposition parties have accused Rachel Reeves of increasing uncertainty and dampening consumer confidence by delaying the budget to November. The chancellor came under fire for a series of leaks and Treasury briefings that triggered speculation about extra taxes, threatening the wealth and incomes of higher earners and retirees.<\/p>\n KPMG said respondents to its survey aged 65 or over were the most likely to be pessimistic about the health of the economy. It said an above average number of older respondents were concerned to keep a lid on spending in the new year.<\/p>\n Younger respondents said they were more optimistic, with almost twice the proportion of those aged 35 to 44 years old saying the economy was improving (24%) as the average (13%).<\/p>\n The survey will disappoint Reeves, who is relying on a rebound in consumer confidence after the budget to boost economic growth.<\/p>\n