Consumer confidence in the UK has collapsed since the start of the Iran war, according to research from the British Retail Consortium. The conflict has caused energy prices to spike, driven by disruptions in the Strait of Hormuz and attacks on regional infrastructure. Rising costs are fueling fears of higher inflation and slower economic growth for oil-importing nations like the UK. A survey of UK adults by Opinium on behalf of the BRC between 10 and 13 March found that 64% of respondents expected the economy to worsen over the next three months, while just 11% predicted improvement. The resulting balance of -53% is a sharp drop from -20% in February. Individuals also expressed greater pessimism about their personal finances, with a balance of -17, down from -6 the previous month. Helen Dickinson, chief executive of the BRC, said consumer confidence has “collapsed” due to the Middle East conflict and its effect on inflation. She noted that businesses and families were facing rising energy costs at a time when the economy had begun showing signs of recovery. Analysts have begun downgrading UK growth forecasts for 2026 as higher energy costs prompt shoppers to cut back on discretionary spending. Official figures showed that inflation held steady at 3% in February, prior to the war, though expectations have shifted. Last month, the Bank of England predicted inflation could return to the government’s 2% target by spring, opening the possibility of interest rate cuts. At last week’s monetary policy committee meeting, rates were left unchanged, with hints that future increases were possible. Slower food price inflation in February was partly driven by lower costs for olive oil, flour, and pizza, though the Food and Drink Federation warned this may be temporary. Karen Betts, the FDF chief executive, said the longer the Middle East conflict continues, the greater its impact on food prices, as energy, maritime fuel, and fertilizer costs put additional pressure on household budgets. Grant Fitzner, chief economist at the Office for National Statistics, explained that the rise in clothing prices was offset by falling petrol costs, which were measured before the conflict intensified and crude oil prices surged. Petrol prices, however, have jumped sharply since the war began. The RAC reported that a litre of unleaded fuel rose by 12p, or 9%, at the end of last week. Chancellor Rachel Reeves said the Treasury is preparing contingency plans to protect consumers from rising energy costs later in the year. She emphasized that any support package would target the most vulnerable households rather than provide universal handouts. Shevaun Haviland, director general of the British Chambers of Commerce, encouraged member companies to continue seeking export opportunities despite a more uncertain global economy. She highlighted the severe impact of disrupted trade routes and soaring energy costs, but urged businesses to pursue international trade rather than retreat. The collapse in UK consumer confidence reflects growing anxiety among households and businesses over the economic fallout from the Middle East conflict. Rising energy costs, inflationary pressures, and global instability are combining to create uncertainty, challenging both policymakers and families as they navigate the months ahead.