UK Consumer Services Sentiment Drops to New Lows Amid Inflation Concerns
Latest Survey Findings on UK Consumer and Business Services
LONDON, May 28 (Reuters) - Sentiment among Britain's consumer-facing services businesses fell to its lowest since February 2025 this month and a recent rebound in business services morale reversed course, a survey from the Confederation of British Industry showed on Thursday.
Profitability and Investment Trends
"Profits are falling sharply and firms are being forced to scale back investment and reduce headcount," CBI economic surveys and data manager Charlotte Dendy said.
Impact of Rising Inflation
"With inflation set to rise in the coming months, consumer caution is likely to intensify, adding further strain to an already subdued demand backdrop," she added.
Key Survey Details
Consumer Services Sector
Further details included:
Profitability and Optimism
• Consumer services firms' overall profitability fell at the fastest pace since August 2020 as their costs rose faster than they were able to increase prices
• The optimism balance in consumer services fell to -49 in May from -45 in February, its lowest since February 2025
Business and Professional Services Sector
Morale and Investment
• The optimism balance in business and professional services fell to -46 in May from -3 in February, its lowest since November 2025
• Firms expect to cut capital spending of all types due to uncertain demand and inadequate returns, with the exception of IT investment by business and professional services firms
Monetary Policy and Survey Methodology
• The Bank of England is keeping a close eye on prices and profit margins to gauge whether the surge in energy prices caused by the Iran war will trigger persistent inflation
• The survey took place from April 27 to May 13 with 97 responses from consumer services firms and 195 responses from business and professional services firms.
(Reporting by David MillikenEditing by William Schomberg)
