Goodbye ‘vibes’ - the vibecession turns into sentiment reality says PwC UK

• Sentiment has dropped to –12 from –8 at the start of 2025 – the lowest score since Autumn 2023

• 87% of UK consumers worried about the UK economy, 84% concerned about the cost-of-living, and 68% are struggling financially or have little to spend after bills

• 37% concerned about job security with 59% of under 35s being the most worried group

PwC has released the spring update of its Consumer Sentiment Index, highlighting changes in economic views among UK adults. The long-running sentiment study has tracked national attitudes towards household spending since 2008, providing insights into potential impacts for consumer markets businesses such as supermarkets, fashion and leisure.  

The sentiment shift

The PwC Consumer Sentiment Survey recorded a score of –8 post-Christmas, which has further declined to –12 for Spring. This marks the lowest score under the new government to date. With personal finances and behaviour now reflecting the sentiment observed in the  Autumn consumer ‘vibecession’ sentiment survey, all indicators are showing a downward trend. The term, coined in the US, refers to a disconnect  between sentiment and economic reality.  

Sentiment has declined across nearly all demographic groups, except amongst individuals aged 25-34 and those in the most affluent socioeconomic groups (AB). The most significant drops are observed among typically positive young demographics (under 25) and families (35-54). 70% of consumers plan to reduce their spending over the next three months. This is the first instance of such a simultaneous decline since the 2022 mini-budget.

The survey highlights a decline in household financial wellbeing compared to last year. Respondents indicated varied degrees of financial distress, with 41% stating they have little left at the end of the month after essential expenses. More worryingly, 19% of those surveyed said they are just making ends meet with a further 8% either unable to pay their bills or in danger of being unable to pay their bills. Overall, consumers judge their household finances to be at their most precarious since Autumn 2023.  

Sam Waller, Leader of Industry for Consumer Markets at PwC UK comments on the latest survey results:

“With over 70% of consumers planning to reduce spending in the next three months, it's crucial for businesses to adopt proactive strategies.”

“Businesses should focus on strengthening customer relationships by offering personalised rewards, incentives and exclusive offers to encourage continued engagement and spending, even amid challenging economic conditions."

Heightened concerns  

PwC’s latest sentiment survey shows consumers expressed heightened concerns about the economy, inflation and global events - worsening even before the announcement of US tariffs. Notably, 87% of respondents expressed concern about the UK economy and 84% were worried about the rising cost of living expenses.

Job security has also been highlighted as a key area with 37% of respondents stating this is a concern. This is more acute amongst younger people, with 56% of those under 25 and 62% of those between 25 and 34 more worried about job security or job prospects, and both age groups more concerned than at the start of the year. These thoughts mirror many of those expressed in the earlier PwC study that stated 1 in 10 people are on the brink of leaving the labour market.

Alastair Woods, Workforce Transformation Partner at PwC UK, said:

“The vacancy rate in the UK is falling, suggesting a softer labour market, partly driven by the economic headwinds but also by organisations considering alternatives to hiring as the National Insurance changes take hold. Many organisations are turning to technology to increase employee capacity, a shift that employees are noticing.”  

How are consumers planning to cut back?

In terms of category spending, groceries are by far the biggest consumer priority, with 44% expecting to spend more on groceries in the next 12 months, 7% more than in January. This is largely due to expectations of higher prices and more eating at home.  

Spending intention on almost every other category has fallen since the start of the year. After the other non-discretionary categories of spending on children and pets, the next biggest priority is holidays. 21% say they will spend more on holidays in the next 12 months, compared with 26% in January.

While holidays are relatively more important compared with other spending categories for older age groups, more under 35s plan to increase spending on health and wellbeing and on clothing.

Conversely, 40% plan to spend less on eating out in the coming year, making this one of consumers’ lowest priorities, alongside going out and big ticket purchases.

Rick Jones, Hospitality, Sport & Leisure Leader at PwC comments on what this might mean for the upcoming bank holiday and half term break:  

"With the upcoming second May bank holiday, it’s encouraging to see that holidays remain a priority for individuals over 35 and we can expect this sector to continue its current upwards trajectory.”

“To engage with budget-conscious consumers, hospitality businesses in the eating and drinking space should prioritise enhancing and innovating the value of the customer experience. Through thoughtful positioning of their services and products, businesses can attract those eager to spend and drive continued loyalty among their patrons."

 
^{Notes to Editors: Survey carried out 28-31 March of 2,069 UK adults (nationally representative).}