Trumpflation at core of rocketing consumer fears
Consumer sentiment has seen its fastest slump in four years as 'Trumpflation' fears grip shoppers, a poll reveals.The quarterly survey by PwC revealed 90 per cent of UK consumers worry about the cost of living as the Iran war stokes inflation.The accountant's barometer of spending intentions was at minus-13 for April, down from minus-1 at the start of the year.That was its lowest since autumn 2023 and the sharpest fall since summer 2022 – a time when inflation was spiralling in the wake of Vladimir Putin's full-scale invasion of Ukraine.Now inflation is on the rise again after Donald Trump's war on Iran choked off oil and gas supplies from the Middle East, driving fuel prices higher.Sam Waller, consumer markets spokesman at PwC UK, said: '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.' Man with a plan: Donald Trump's war on Iran has choked off oil and gas supplies from the Middle East, driving fuel prices higherHe said firms would need to respond with 'agility and resilience' as customers become 'increasingly cost-conscious' and their own input costs rise.It comes amid growing fears that the war could drive Britain into 'stagflation', the toxic combination of stagnant growth and rising inflation.The Bank of England has said a long stand-off in the Middle East could see inflation climb to 6.2 per cent and it might need to put up interest rates six times.PwC's poll showed a sharp drop in consumers' perceptions of being financially healthy, and of how much money they have left at the end of the month for luxury items or savings. It also revealed a big rise in those 'struggling or in trouble' – missing bills or loan repayments, or coming close to doing so.The effect was worst in under-35s, with a 20 per cent fall in those feeling financially healthy and a 9 per cent rise in those struggling.Nearly eight of ten consumers said they would cut spending over the next three months.Two-fifths said they would simply buy less while 37 per cent said they would eat out less often or trade down to cheaper brands.Amid the surge in petrol and diesel prices, those saying they would drive less doubled from 12 per cent to 24 per cent. Consumers also said they would prioritise grocery spending as well as looking after pets, the survey found.DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
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Trumpflation at core of rocketing consumer fears
