Pessimism takes root in UK as shoppers struggle to afford essentials

UK consumer pessimism is deepening as the Iran war and higher commodity costs threaten a fresh cost-of-living shock. Which?’s latest tracker shows half of households, about 14 million people, are already making daily adjustments to cover essentials, while confidence in the UK economy slumped 13 points to -56, the weakest reading since end-2022. The survey points to mounting strain from higher oil, gas and fertiliser prices filtering into household budgets. Two-thirds of UK adults now expect the economy to worsen over the next 12 months, and 26% say they are regularly dipping into savings just to bridge the gap between income and essential spending. Confidence in household finances also fell to -15, the lowest since April last year. For precious metals, the takeaway is a more inflationary, risk-off macro backdrop that is broadly supportive for gold as a hedge, even though the article does not reference the metal directly. The Bank of England now expects UK inflation to rise to 3.5% and remain more than a point above target through 2026, which could keep real rates under pressure and maintain investor demand for defensive assets.