UK Consumer Spending Declines Amid Budget Uncertainty, Inflation Fears

Consumer confidence in the UK economy has declined to its lowest point in 2025, driven primarily by rising food and energy costs, prompting many consumers to reduce or defer spending on everyday items and big-ticket purchases (Article 1). Speculation about potential property tax reforms ahead of the Autumn Budget has further dampened buyer and seller confidence in the prime housing market, with a notable decrease in commitment to buying in the next six months, particularly among second home buyers and investors (Article 2). Small businesses in Scotland are also facing a crisis of confidence, with growth forecasts falling and fears of contraction rising, especially due to concerns about the impact of upcoming Budget announcements on their finances (Article 3). Taylor Wimpey, a major UK housebuilder, reported a dip in sales activity attributed to Autumn Budget uncertainties affecting customer sentiment and purchasing propensity, despite confidence in the long-term housing market fundamentals (Article 5). Collectively, these trends highlight widespread economic caution in the UK, fueled by inflationary pressures and fiscal policy uncertainties surrounding the upcoming Budget, affecting consumers, homeowners, and small businesses alike.