Consumers continue to feel the strain of rising costs and affordability challenges, which are shaping how they think about their finances, their future, and their everyday spending decisions.

Consumer sentiment has improved modestly since July 2025, with the RED C Consumer Mood Index rising by 12 points. However, the overall mood remains deeply negative at -49 (+12pts v Jul-25), well below levels seen a year ago (-27 v Oct-24). While pessimism has eased slightly, particularly among higher social grades and younger adults, the majority still expect the economy to worsen over the next six months. The outlook for the global economy mirrors this trend, with sentiment improving slightly but still firmly in negative territory.

Cost-of-living concerns continue to weigh heavily, with expectations for improvement still extremely low. Grocery price inflation has picked up again, and energy suppliers have announced price hikes ahead of winter. This is compounded by the phasing out of State cost-of-living supports such as energy credits, and Budget 2026 that offered little in the way of direct financial relief for households. As a result, expectations for financial wellbeing, disposable income, and borrowing costs remain negative, with little sign of recovery.

Sentiment around housing affordability continues to be among the most negative of all indicators. Despite some budgetary measures aimed at stimulating construction, consumers remain unconvinced that these will meaningfully improve affordability. The current cycle of interest rate cuts by the ECB appears to have come to an end, but even with lower borrowing costs, affordability is unlikely to improve in the near term without a significant increase in housing supply.

subdued, with more people expecting to cut back on entertainment, holidays, and consumer goods. This reflects a cautious mindset shaped by ongoing financial pressures and a perceived lack of meaningful action by policy makers to address key economic challenges.

With many consumers still under financial pressure, this makes price a critical factor in household decision-making. But it’s not all about being cheaper. It’s about offering clear, compelling value.

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