Consumer confidence in the United Kingdom has fallen sharply as households react to rising energy costs triggered by the war involving Iran. New data shows a marked increase in people saving rather than spending, with many avoiding major purchases amid fears that higher oil and gas prices will soon push up the cost of everyday goods and services.

Oil prices have surged to above 100 dollars a barrel, while domestic gas costs have climbed steeply in recent weeks. Analysts warn that the household energy price cap could rise significantly from July, potentially adding hundreds of pounds to annual bills. Food prices are also expected to increase as higher fuel and transport costs filter through the economy.

The government, already grappling with long-standing cost of living pressures that began after Russia's invasion of Ukraine, faces limited room to offer broad financial support. With millions living in poverty and public finances strained by pandemic and energy crisis measures, ministers say assistance will be targeted at the most vulnerable. Surveys suggest inflation could reach 4 percent by the end of the year, deepening concerns about living standards.