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3d ago

Record Tariffs and Inflation Fears Drive Consumer Confidence to New Lows

U.S. and UK consumers face worsening economic sentiment as tariffs disrupt trade, inflation expectations rise, and business activity slows.

A heavy goods vehicle moves amongst shipping containers at the Port of Felixstowe in Felixstowe, Britain, February 17, 2025. REUTERS/Chris J. Ratcliffe
Shoppers carrying umbrellas walk past a puddle at Oxford Circus, in London, Britain, January 5, 2025. REUTERS/Hollie Adams
Consumers were unsettled by the instability caused by the threat of a global trade war and by increases in the cost of living
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Overview

  • U.S. business activity fell to its weakest level since December 2023, with S&P Global's Composite PMI dropping to 51.2 in April, signaling sluggish growth.
  • The U.S. average tariff rate has reached its highest level in over a century, contributing to inflation concerns and economic uncertainty.
  • Consumer sentiment in the U.S. is now lower than during the 2008 financial crisis, driven by fears of tariff-induced inflation and economic stagnation.
  • In the UK, consumer confidence has dropped to −23, its lowest since late 2023, as households grapple with rising costs and trade war repercussions.
  • UK factory employment has contracted at its fastest pace in over four years, with businesses cutting investment due to higher taxes and tariff pressures.