Confidence plunges in blow to Burnham: Households most gloomy since 2023 amid fears for jobs

Household confidence is at its lowest level since the cost-of-living crisis in 2023, gloomy figures revealed yesterday.

Workers are growing anxious about job security, the findings from S&P Global’s UK consumer sentiment index suggested.

Employment income fell for the first time in more than three years, the figures showed.

It is a blow to hopes of a ‘Burnham bounce’ under the new Prime Minister, who has said he wants to give households more ‘breathing room’ over the cost of living with early policies targeting energy bills and bus fares.

The index reading of 42.9 for August fell from a four-month high of 43.4 in July.

This means the average level of consumer confidence in 2026 so far is the lowest for three years.

In 2023, households were being squeezed by rampant inflation after Russia’s invasion of Ukraine pushed up oil prices. 

This time, job fears are adding to concerns, according to S&P’s poll of 1,500 households. Consumers expect their finances ‘to remain under pressure’ over the coming year, the survey found.

That is despite official figures showing the economy made a robust start to the year, with GDP growing by 0.6 per cent in the first quarter and 0.4 per cent in the second quarter.

Maryam Baluch, economist at S&P Global Market Intelligence, said: ‘Job insecurity is now at its highest in nearly three and a half years, with incomes falling for the first time since April 2023.

‘Debt and the depletion of savings also weighed increasingly on household sentiment in August. Demand for additional borrowing picked up as households reported a faster erosion of their savings.’

The findings come amid fears that Burnham and Chancellor John Healey will pile even more pain on households and businesses with another tax raid. 

Economists last week warned that Labour could hike taxes by up to £25billion to fund the new PM’s spending pledges, which include plans to increase housebuilding, overhaul social care and raise defence spending.

That would add to the £75billion tax increases already imposed under Keir Starmer and his Chancellor Rachel Reeves.

Labour’s anti-business policies, including a hike in employer National Insurance and steep hikes in the minimum wage, are already being blamed for job losses. 

Unemployment has risen from 4.1 per cent to 4.9 per cent since the general election, with more than 300,000 added to the dole queue.

Younger people have been hit hardest, with more than a million of those aged 16 to 24 classed as not in employment, education or training.

A poll published yesterday by the Chartered Institute of Personnel and Development showed just 57 per cent of private sector employers plan to recruit in the next three months, a joint post-pandemic low.