LONDON — Households in several major economies are changing the way they spend on travel, dining, transport and other discretionary purchases as fluctuations in energy prices feed into broader concerns about inflation, according to recent surveys, central bank research and consumer analysts.
Recent increases in fuel and energy costs, linked in part to geopolitical tensions affecting global energy markets, have prompted many consumers to reassess household budgets even as labor markets in several countries remain relatively resilient. Surveys published in early July indicate that many families expect higher living costs over the coming months and are prioritizing essential spending over non-essential purchases.
The Bank of Canada's second-quarter Survey of Consumer Expectations found that rising energy prices had become a growing source of inflation concerns, with many respondents saying they planned to substitute toward lower-cost essentials, reduce discretionary spending and limit driving. The survey also showed households expecting a stronger inflation impact from Middle East tensions reported weaker spending intentions than other respondents.
In the United States, the New York Federal Reserve reported that one-year inflation expectations increased in June, while gasoline prices remained an important factor shaping consumer views on future inflation. Although respondents expressed greater confidence in their personal financial outlook than earlier in the year, concerns over higher energy costs continued to influence expectations.
Separate polling by Gallup found that about two-thirds of Americans said fuel costs had caused financial hardship for their households, with higher gasoline prices affecting travel plans and everyday spending decisions.
Business surveys have also pointed to changing consumer behavior. Deloitte reported that roughly three-quarters of U.S. consumers expected gasoline prices to rise, while PwC said UK households were increasingly planning to reduce spending on retail purchases, eating out and leisure activities as higher energy bills added to cost-of-living pressures.
In Germany, a study by Boston Consulting Group found consumers remained more pessimistic than many of their European counterparts, citing inflation and energy prices among their primary concerns. The report said shoppers were placing greater emphasis on discounts, private-label products and savings while delaying discretionary purchases.
Analysts said the extent of spending adjustments will depend on whether energy prices stabilize in the coming months. Central banks and economists continue to monitor consumer expectations closely because persistent changes in household spending can influence inflation, economic growth and monetary policy.
