Intrum : The cost of living crisis – are consumers losing hope

The economic situation for consumers is extremely challenging, with many forced to skip payments and pessimistic about their financial future, according to findings from the annual European Consumer Payment Report (ECPR).

The annual survey of 20,000 European consumers across 20 countries paints a bleak picture. As real earnings stagnate or decline in the face of surging inflation and higher borrowing costs, cutting day-to-day expenses and switching to budget retailers can only go so far. Years into economic crises driven by the Covid-19 pandemic and war in Ukraine, there appears to be little light at the end of the tunnel.

Almost everything has become more expensive. The European Commission expects inflation in the eurozone to average 5.6% over 2023, but prices have been rising at a much faster pace than that. Inflation is expected to have peaked at 8.6% in the euro area and 10.0% across the wider EU. The UK has seen even higher rates. In response, central banks have raised interest rates, increasing the cost of borrowing and adding further pressure on consumers.