Soaring food and fuel prices and rising interest rates kept confidence at a 48-year low, the research carried by out GfK found.

The contest to succeed Boris Johnson as leader of the ruling Conservative Party is taking place amid the worst cost of living crisis in a generation, with inflation at a 40-year high and on track to hit double figures in months. 

The battle pits Foreign Secretary Liz Truss, who has promised tens of billions of pounds of tax cuts if she wins, against former Chancellor of the Exchequer Rishi Sunak, a continuity candidate staking his hopes on a reputation for prudence.

“Against this financial backdrop, the UK electorate is looking for a new leadership with a commitment to unleashing growth, tackling inflation and cutting taxation,” said Joe Staton, client strategy director at GfK. “The successful candidate will need to deliver a much-needed shot in the economic arm of the country if they are to help improve consumer confidence.”

All of the measures that make up GfK’s confidence index remained deep in negative territory. 

The only bright spot emerged when households were asked how they expected their financial situation to change over the coming year. Staton said evidence of a modest improvement “might reflect optimism over imminent change at the top of the UK government.” BM