UK consumer confidence sinks to three-year low as job fears and mortgage costs bite ahead of Budget

From the Newshound archive · first published 21 September 2026 · last updated 22 September 2026.

British household confidence has hit a three-year low, with job insecurity at its worst since February 2023 and mortgage rates climbing to multi-year highs. September's S&P Global consumer sentiment index reading of 42.7 prompted economist Maryam Baluch to warn of a "downbeat mood" as the early optimism surrounding Andy Burnham's new government fades. Average two-year fixed mortgage rates reached 5.88% on Monday, pushing typical monthly repayments up by around £150. Chancellor John Healey confronts these bleak figures ahead of next month's Budget, where tax rises are broadly anticipated.

Retail workers are reporting the sharpest job security fears of any sector, squeezed by higher employment costs and Iran-war supply disruptions.

Over 53% of households now expect the Bank of England to raise interest rates, with markets pricing in four hikes through to the end of next year, beginning in November.

Asda's income tracker shows spending power — money left after essentials — at its weakest in six months, with households running down savings and leaning on credit.