The Iran war has led to a surge in pessimism in the UK as half of households are already struggling to afford everyday essentials.

The escalating conflict in the Middle East, which has driven the price of oil, gas, crop fertiliser and other raw materials sharply higher, threatens to cause another cost of living shock.

The latest Which? consumer insight tracker found that price pressures were forcing half of households, an estimated 14 million, to make at least one adjustment – dip into savings, sell possessions or borrow money – to cover the cost of essentials on a daily basis.

Confidence in the future of the UK economy plummeted by 13 points to a score of -56 in the month to 13 March, the lowest level recorded since the end of 2022, the tracker found.

Which? said this score reflected “a deep-seated pessimism across the country”, with two-thirds (67%) of UK adults now expecting the national economy to worsen over the next 12 months, while just 12% think it will improve.

Confidence has not yet reached the depths of the pandemic, when the score hit -78, or the 2022 cost of living crisis, when it fell to -70, but the drop highlights a growing strain as millions of households continue to struggle.

Savings are shifting from a safety net to a lifeline, with a quarter (26%) of households now regularly dipping into savings to bridge the gap between their income and the cost of essentials. This contrasts with the end of last year when financial stress appeared to be declining.

Confidence in the future of household finances has hit its lowest level since April last year, falling five points to -15 this month.

Headline UK inflation is now expected to stay higher for longer. Before the conflict in the Middle East, UK inflation had been expected to fall to the Bank of England’s 2% target in the coming months, from 3% now. The Bank now expects the rate to rise to 3.5% and stick at more than a percentage point above target throughout 2026, putting further pressure on households.

Sue Davies, the head of consumer protection policy at Which?, said: “Our research shows a concerning shift in consumer sentiment, with confidence in the economy hitting its lowest point in years as households face a daunting combination of rising prices and global instability.

“Pressure on budgets is becoming unsustainable for many. We would encourage anyone who is struggling to keep up with their bills to speak to their providers as soon as possible and seek free, independent debt advice.”

The group said businesses should be doing everything they could to help their customers.