Rachel Reeves faces a fresh setback as damning poll reveals a sharp slump in consumers' confidence in the UK economy as 'people see dark days ahead'

Struggling Rachel Reeves faces another setback with recent data showing a significant drop in consumer confidence, indicating that tough times may lie ahead.

This adds to the overall pessimism surrounding the economy at the beginning of the year. Supermarket giant Sainsbury’s announced a reduction of 3,000 jobs, and budget retailer Primark reported a decline in sales.

Amidst stagnant growth and rising inflation, the Chancellor has traveled to the World Economic Forum in Davos in a bid to attract investments from international executives.

During the meetings she has repeatedly insisted on her commitment to growth and that she is taking on regulators getting in the way of business.

But critics say it is her own policies, in particular the £25billion raid on employer national insurance that stunned business, that are doing the biggest damage – and that there has so far been little sign of the promised drive to boost the economy.

Today, a closely-watched new survey by data firm GfK reveals that the gloom is now feeding through to ordinary households. It showed that consumer confidence has this month dropped to its lowest level since December 2023.

Neil Bellamy, GfK’s consumer insights director, said: ‘New Year is traditionally a time for change, but looking at these figures, consumers don’t think things are changing for the better.’

The poll revealed notable falls in households’ views on the wider economy.

Rachel Reeves (pictured in Davos) has received a fresh setback as figures show a sharp slump in consumer confidence in a sign that ‘people see dark days ahead’

Rachel Reeves (pictured in Davos) has received a fresh setback as figures show a sharp slump in consumer confidence in a sign that ‘people see dark days ahead’

Supermarket chain Sainsbury¿s yesterday revealed a cull of 3,000 jobs

Supermarket chain Sainsbury’s yesterday revealed a cull of 3,000 jobs

Primark¿s parent company Associated British Foods revealed a sales setback caused by the darkening mood among consumers since the Budget

Primark’s parent company Associated British Foods revealed a sales setback caused by the darkening mood among consumers since the Budget

‘These figures underline that consumers are losing confidence in the UK’s economic prospects,’ said Mr Bellamy.

There was also a big jump in a measure of savings intentions.

‘This sharp increase is unwelcome because it’s another sign that people see dark days ahead and are therefore thinking of putting money aside for safety,’ Mr Bellamy added.

In another blow, a separate report from the Confederation of British Industry (CBI) found British factories continued to struggle at the start of 2025 as optimism among manufacturers sagged to its lowest level in over two years.

‘Manufacturers have entered the new year in a grim mood. Confidence has evaporated over the last three months as orders have dropped,’ said Ben Jones, lead economist at the CBI.

Ms Reeves insisted during a Wall Street Journal event in Davos that the government was ‘proudly pro-business’ and was forced once again to defend the Budget, claiming there was ‘no serious alternative’ to her actions.

‘I’m not going to apologise for putting our public finances on a firm footing,’ she said. ‘It was the Budget that was necessary.’

The Chancellor said the government was now embarking on reforms ‘removing those barriers that have stopped businesses investing in Britain for too long’.

Ms Reeves is currently with fellow politicians and business leaders at the World Economic Forum in Davos

Ms Reeves is currently with fellow politicians and business leaders at the World Economic Forum in Davos 

Ms Reeves insisted during a Wall Street Journal event in Davos that the government was ¿proudly pro-business¿ and was forced once again to defend the Budget, claiming there was ¿no serious alternative¿ to her actions

Ms Reeves insisted during a Wall Street Journal event in Davos that the government was ‘proudly pro-business’ and was forced once again to defend the Budget, claiming there was ‘no serious alternative’ to her actions

Charlie Nunn, CEO of Lloyds Banking Group, said a number of business leaders ‘have been concerned about what’s going on at the moment’

Charlie Nunn, CEO of Lloyds Banking Group, said a number of business leaders ‘have been concerned about what’s going on at the moment’

Yesterday, the boss of Lloyds Banking Group – Charlie Nunn – said: ‘The Chancellor has talked about having set the foundations and having got the foundations right. That was really important.

‘We didn’t have economic plans for the UK that was stable and in a good place. But what we will see over the next few months is the things they have talked about need to now be accelerated and they need to come at pace.’

Mr Nunn, who is also in Davos, told Bloomberg TV that a number of business leaders ‘have been concerned about what’s going on at the moment’.

The mood on the high street has been particularly grim as Ms Reeves’s NI hike falls particularly hard on major retailers.

Sainsbury’s said the ‘particularly challenging cost environment’ was behind its decision to cut thousands of jobs as it shuts down its remaining cafes and closes patisserie and pizza counters.

And Primark’s parent company Associated British Foods revealed a sales setback caused by the darkening mood among consumers since the Budget.

Finance director Eoin Tonge said: ‘There’s no doubt we are suffering from a weak consumer, particularly elements of our consumer base who are clearly struggling.’

You May Also Like

Impending Political Turmoil Looms Over Germany with Rumbling Economy, Failing Infrastructure, and Shocking Refugee Incident: AfD’s Rising Influence Examined by ROBERT HARDMAN

The hideous news breaks as I am walking through the snow in…

Emergency landing made by Jet2 plane after passenger dies during flight from Tenerife to Nottingham, diverting to Spain

A JET2 plane was forced to make an emergency landing after a…

Kerry Katona Flaunts Stunning Two-Stone Weight Loss in Red Bikini During Solo Valentine’s Day in Thailand After Split from Fiancé Ryan Mahoney

Kerry Katona has had her fair share of ups and downs in…

Justin Baldoni flaunts muscular body in Hawaii after putting aside Blake Lively controversy

Justin Baldoni showed off his buff physique as he holidayed in Hawaii…

Hamas frees three Israeli captives for 369 Palestinians following Trump’s warning of consequences if all hostages were not released.

Israeli hostages have been freed by Hamas militants in exchange for 369…

Spot the Mouse in 11 Seconds with Perfect Vision and High IQ

Test your eyesight and powers of logic with this fun brain teaser.…

I am a skilled imitator selling high-quality replicas for a steep price, fooling even seasoned professionals…my clients are not who you would expect

DAVID HENTY’S neat, whitewashed bungalow is easy to find – there’s a…

Sun reporter Jerome Starkey flies on Wildcat chopper to intercept Russian warship in tense English Channel encounter

THIS is the moment Sun Man Jerome Starkey joined Royal Navy gunboats…

Man bravely fights off 6ft shark as it attacks and bites off both his wife’s hands while she was taking a photo

A BRAVE husband tried to save his wife as she was savaged…

Attention: University of Colorado Student Has Been Missing for Nearly a Week

A University of Colorado Boulder student has been reported missing, and multiple…

British businessman who won a Bafta found deceased in Barcelona after going missing under undisclosed circumstances two years ago

A BRIT businessman has been found dead after going missing in Barcelona…

Sneak peek at Bridgerton season 4: Penelope and Colin as parents, along with a sizzling new romance story

She was Bridgerton’s perennially single character. Fans of the popular Netflix series…