UK job security fears have reached their worst level in 43 months, with households across almost every sector growing more anxious about employment even as the broader economy continues to grow, according to data published by S&P Global. The figures come from the company’s UK consumer index, which surveys a panel of 1,500 households, and cover the month of September.
The overall consumer sentiment index slipped to 42.7 in September from 42.9 in August. S&P Global described the reading as indicating a ‘notable strain on financial confidence across UK households.’ The only sector to escape the deteriorating mood was IT and telecoms, which recorded improving job security at a time when every other industry tracked by the survey moved in the opposite direction.
Retail workers report the sharpest UK job security fears
Retail came out worst among all the sectors surveyed. Workers in the industry cited a combination of higher employment costs, weaker consumer spending and supply chain disruptions linked to the Iran war as sources of pressure. That combination has left retail employees more anxious about their positions than workers in any other part of the economy covered by the index.
Consumers are responding to the broader unease by pulling back on larger discretionary purchases. Spending on cars, holidays and household appliances has remained subdued, as households appear unwilling to commit to significant outlay while borrowing costs may yet rise further.
Maryam Baluch, S&P Global economist, said the scale of the deterioration points to a structural problem in how workers perceive their prospects. ‘September data show a downbeat mood spreading across UK households as improved sentiment surrounding the new government is eroded by renewed worries over energy prices, the cost of living and job prospects,’ Baluch said. She added that job insecurity rising to its highest level for more than three-and-a-half years highlights ‘a growing disconnect between rising economic growth and perceptions of employment security.’
Incomes fall for the first time since April 2023
Alongside the job security data, S&P Global also recorded a fall in household incomes for the first time since April 2023. That development is likely to reinforce the caution already visible in consumer spending patterns. When incomes are perceived to be slipping at the same time as job security deteriorates, the incentive to hold back on larger purchases becomes considerably stronger.
The income data adds a further dimension to what had previously looked like a sentiment problem. If households are now recording actual income falls rather than just worrying about future prospects, the drag on consumer spending could prove more durable than policymakers had hoped.
The labour market picture is not confined to consumer-facing sectors. Hiring across the City has fallen 32 per cent from January 2019, according to data published in June by LinkedIn, as higher interest rates and corporate cost-cutting weigh on firms that dominate London’s labour market. That decline predates the current bout of household anxiety but sits alongside it, suggesting the weakness in employment confidence has roots across multiple parts of the economy.
Between the income decline recorded in September, the 43-month high in job insecurity and the pull-back from big-ticket spending, the consumer index presents a picture of households that are increasingly risk-averse despite the headline growth numbers running in the other direction. Retail, carrying the heaviest burden of rising costs and falling demand simultaneously, faces the sharpest test of whether that mood lifts or deepens in the months ahead.
