Global trade tensions push UK consumer confidence to historic lows as export woes mount

Department of Research, Studies and International News 25-04-2025

Concerns over escalating trade tensions sparked by the United States have caused a sharp decline in UK consumer sentiment, pushing confidence levels to an unprecedented low, according to the British Retail Consortium (BRC). The findings reflect widespread public anxiety following a wave of new tariff announcements from Washington.

The BRC’s latest consumer confidence survey, conducted between April 4 and April 7, captured public sentiment immediately after U.S. President Donald Trump introduced new trade tariffs targeting key global partners. The results reveal a marked deterioration in how UK consumers view both the broader economy and their personal financial stability.

According to BRC CEO Helen Dickinson, the survey shows a steep fall in consumer optimism:

“Given that our data collection took place just days after the U.S. imposed new trade measures, it’s not surprising to see a slump in economic expectations. While the initial scope of tariffs has since been scaled back for many nations, the anticipated economic fallout had already started to weigh heavily on UK confidence. Nevertheless, with Easter approaching, retail spending expectations saw a modest lift.”

Key findings from the BRC’s report include:

Confidence in the UK economy fell to -48 in April, down from -35 the previous month.

Views on personal financial circumstances dropped to -16, compared to -10 in March.

Expected spending on retail slightly increased to +3, up from zero.

Overall personal spending expectations slipped to +10 from +11.

Intentions to save improved slightly, moving from -5 to -4.

These figures do not reflect the subsequent pause on many U.S. tariffs announced on April 9, indicating that confidence was already fragile before any potential reprieve.

Despite the temporary pause, Dickinson warns that retailers still face an uphill battle. She highlights rising costs, such as increased National Insurance contributions, the higher National Living Wage, and new packaging regulations, as significant burdens totaling £7 billion this year. Retailers are also wary of the potential influx of redirected, lower-cost Chinese goods due to shifting U.S. trade policies.

Exporters have also begun to feel the sting. The Confederation of British Industry (CBI) reported a sharp fall in export orders, with its monthly balance plunging to -41 in April from -29 in March, the lowest since late 2020, excluding a brief dip in November 2024.

CBI lead economist Ben Jones remarked:

“While output declines in manufacturing appear to be easing, sentiment remains low amid rising costs and diminishing demand. Manufacturers are cutting back on hiring and investment across multiple fronts, including infrastructure, equipment, R&D, and workforce training.”

He added that the current geopolitical environment is proving increasingly difficult for exporters, as declining optimism and weakening international demand persist.

Meanwhile, Wall Street is bracing for a turbulent session. U.S. stock futures suggest significant losses, with the Dow Jones Industrial Average expected to fall by around 250 points. This follows President Trump’s recent suggestion that paused tariffs could be reinstated within weeks if trade deals are not secured.

As uncertainty clouds global markets, the UK economy finds itself vulnerable to both international developments and domestic challenges.