Threat of trade war spooks consumers

According to British Retail Consortium (BRC)-Opinium data the state of the economy dropped significantly to -48 in April, down from -35 in March.

Their personal financial situation worsened to -16 in April, down from -10 in March.

Their personal spending on retail rose to +3 in April, up from 0 in March.

Their personal spending overall fell slightly to +10 in April, down from +11 in March.

Their personal saving rose slightly to -4 in April, up from -5 in March.

Helen Dickinson, Chief Executive of the British Retail Consortium, said, “With fieldwork completed just days after Donald Trump’s “Liberation Day” tariffs, it is unsurprising that consumer expectations for the economy plummeted to a record low.

“The original tariff schedule, since reduced for most countries, was expected to reduce growth in the UK and elsewhere. Yet despite this economic pessimism, expectations of retail spending rose slightly as the prospect of Easter shopping drew closer.

“Unsurprisingly, expected spending on groceries saw the largest increase, with over 4 in 10 expecting to spend more in the coming months, rising to half of the over 55s. Meanwhile, Gen Z planned to take advantage of the improving weather, with rising spending expectations for eating out and health & beauty products.

“Even with a pause on many of the US tariffs, business and consumer confidence remains fragile. The risk of higher global prices is an unwanted addition to the £7bn in new costs hitting retailers this year from higher employer National Insurance, increased NLW, and a new packaging tax.

“Many retailers are also concerned about the risk of cheap Chinese products being diverted from the US to other destinations, including the UK. The UK should review the de minimis rules, which allow low-value imports to avoid checks and duties. It is vital the UK’s strict quality standards are upheld to ensure the best outcome for British businesses and consumers.”