UK consumer confidence has dropped to its lowest level in three months, according to a report by S&P Global. The decline is attributed to growing concerns about rising mortgage payments and job insecurity. The S&P Global consumer sentiment index fell to 42.7 in September, down slightly from 42.9 in August. Over half of the 1,500 people surveyed expect borrowing costs to rise in the next year. Fixed-rate mortgages, which are popular among homebuyers for their predictable payments, have reached multi-year highs. The average two-year fixed mortgage rate reached 5.88%, the highest since April, while the five-year rate hit 5.92%, the highest since October 2023. These increases are expected to raise monthly payments by about £150 for a typical £250,000 mortgage over 25 years since early 2026. Over the past four years, the average monthly mortgage payment has risen from around £600 to £900. Confidence in the jobs market has also fallen to its lowest level in three-and-a-half years. The number of payroll employees has been steadily declining over the past six months, and job vacancies are at a five-year low. Despite rising fuel and energy costs following the US attack on Iran, the jobs market has remained relatively strong. However, employers are showing more caution in hiring new staff, contributing to the decline in confidence. The British Chamber of Commerce has urged the government to provide support to businesses after a series of tax increases in recent years, including higher national insurance payments for employers. A survey of 5,000 companies in the second quarter of 2026 found that only 17% planned to increase investment in the coming months, the lowest level since the end of the pandemic. Chancellor John Healey may introduce tax increases in his first budget to help manage rising government borrowing costs, which have spiked due to the conflict in the Middle East. In response, the German government announced plans to reduce fuel tax by 15p per liter, effective 1 October. Ed Davey, leader of the Liberal Democrats, has called for a reduction in fuel duty to help offset rising petrol and diesel prices. Healey may focus tax increases on wealthier individuals, such as raising capital gains tax. However, analysts suggest that targeted tax increases may not generate enough revenue to cover rising defense spending and debt costs while maintaining a £20bn reserve buffer. Economist Maryam Baluch from S&P Global Market Intelligence noted that a sense of pessimism is spreading among UK households, as optimism about the new government is being overshadowed by renewed worries about energy prices, the cost of living, and job security. She added that increased volatility in energy markets, tied to tensions in the Middle East, has made it harder for people and businesses to access credit. Expectations of tighter monetary conditions are beginning to impact borrowing, leading to caution about financial prospects and posing risks to the broader economy. Andy Burnham, the leader of the Labour Party, said he would need to make "difficult decisions" on economic policy to ensure the country "remains on track."