UK consumer confidence has fallen to its lowest level on record in March after conflict involving Iran pushed up energy prices and intensified fears of renewed inflation, according to the British Retail Consortium.

A survey conducted by Opinium for the BRC found 64 per cent of respondents expect the economy to worsen over the next three months, while only 11 per cent anticipate improvement, leaving a net balance of minus 53, down sharply from minus 20 in February. Expectations for personal finances also deteriorated, falling to minus 17 from minus 6.

Helen Dickinson, chief executive of the BRC, said “consumer confidence collapsed as the Middle East conflict raised the prospect of higher inflation in the months ahead”. She added that “the rise in global energy prices is particularly unwelcome for businesses and families” at a time when inflation had begun to ease.

The deterioration in sentiment follows disruption to global energy markets linked to the conflict, including pressure on key shipping routes such as the Strait of Hormuz and damage to infrastructure. These factors have driven up oil prices, raising costs across energy-importing economies including the UK.

According to the Office for National Statistics, inflation held at 3 per cent in February, before the latest escalation fed through to prices. Grant Fitzner, the ONS chief economist, said clothing prices were the largest upward driver, while petrol costs reflected data collected before oil prices surged.

The Treasury is preparing contingency measures should energy costs continue to climb, with Chancellor Rachel Reeves indicating any support would be targeted rather than universal.

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