UK Consumer Sentiment Falls as Mortgage Costs and Job Worries Grow
UK consumer sentiment fell to 42.7 in September 2026, down from 42.9 in August. That was the lowest reading in three months.
Households pointed to fears about higher mortgage payments and job insecurity. The Guardian
More than 50% of the 1,500 respondents said they expect the cost of borrowing to rise over the next year. Think of it as a temperature check on household finances, where borrowing costs mean the interest paid on loans and mortgages. Confidence about the jobs market fell to its lowest level in three-and-a-half years.
Mortgage pricing moved higher during the survey window. The average two-year fixed residential mortgage rate, which locks the interest rate for two years, was 5.88% on 21 September 2026, up from 5.84%. That was its highest since 16 April, according to Moneyfacts data. The average five-year fixed residential rate was 5.92% on 21 September, up from 5.88%. That was its highest since October 2023.
The cumulative rise since the start of March was expected to add about £150 to monthly payments on a typical £250,000 loan over 25 years. Official figures put the average direct debit for monthly mortgage costs at about £900, up from about £600 over the past four years.
Business expectations also showed lower readings. A British Chamber of Commerce survey of 5,000 companies in the second quarter of 2026 found only 17% planned to increase investment in the coming months. That was a post-pandemic low.
The September result follows several low readings in 2026 for the S&P measure. It has been collected monthly since 2009 from a panel of 1,500 UK households structured by gender, region and age to reflect the population. In April, the index fell to 42.3 from 44.1, a 33-month low. Reuters In February, the same survey put confidence at its lowest in two years as households worried about debts. By August it had recovered to 42.9 from a four-month high of 43.4, with the average reading so far in 2026 the weakest since 2023. S&P Global
Other measures show different results. The GfK UK consumer confidence index rose to minus 17 in June from minus 23, its highest since January. Reuters In August, GfK recorded a two-year high as households reported more confidence about making major purchases.
The broader context here helps explain the split between the surveys. S&P captures pressure on household budgets, debt and jobs. GfK has picked up more willingness to spend on big-ticket items. If mortgage repricing and cautious hiring persist, household strain can limit spending. Borrowing looks more expensive. Hiring looks more fragile. Investment intentions are already subdued. For fiscal and monetary policymakers, who set tax, spending and interest-rate policy, the question is whether consumer caution turns into retrenchment or steadies if borrowing costs level off. The September data lean toward the first risk.
