What you need to know this week
- UK inflation rose to 3.8% in July 2025, exceeding expectations and driven by air fares and food prices.
- Consumer confidence has fallen by 31 points year-on-year, with pensioners the most pessimistic group.
- 2.1 million UK households missed at least one essential payment in July 2025.
- 13.9 million households made at least one adjustment to cover essential spending in the same month.
- The ICO has launched consultations on ‘recognised legitimate interest’ and mandatory data protection complaints processes.
- Breathing Space registrations rose 14% year-on-year to 8,400 in July 2025.
- 4,001 DROs were recorded in July 2025, 78% above the long-term monthly average.
- StepChange completed 14,052 debt advice sessions in July, up 4% month-on-month.
- The next MEGA.AI Utility event will take place on 9 October 2025 in Manchester.
- The CSA conference will be held on 11 September 2025.
- Calls grow for a national water social tariff amid evidence of reduced water usage among older people.
- LACEF and CIVEA release updates on council tax enforcement and collaborations.
Key Themes
Inflation and Cost of Living [link] [link] [link]
UK inflation reached 3.8% in July 2025, surpassing expectations and driven by transport and food prices. Food inflation stood at 4.9%, the highest rate since February 2024. This is critical for debt professionals as rising essentials costs are a major driver of arrears and problem debt, particularly for low-income and vulnerable households.
Consumer Confidence and Financial Resilience link
Which?’s Consumer Insight Tracker reports a 31-point drop in confidence since July 2024. In July 2025, 56% believed the economy would worsen. This signals increasing consumer distress, which will likely lead to higher demand for support, increased arrears, and reduced credit performance.
Debt Advice and Insolvency Trends [link] [link]
StepChange completed 14,052 debt advice sessions in July 2025, up 7% year-on-year. The month also saw 8,400 Breathing Spaces, 5,915 IVAs and 4,001 DROs – significantly above long-term averages. These trends indicate sustained financial pressure and rising need for insolvency and support services.
Data Regulation – DUAA 2025 Consultations [link] [link] [link]
The ICO is consulting on draft guidance for the Data (Use and Access) Act 2025. This includes a new ‘recognised legitimate interest’ lawful basis and a mandatory requirement for complaint handling. Financial services and collections firms must align data governance practices and assess impacts on processing, especially regarding vulnerable customers.
Council Tax Enforcement and Local Authority Practice [link] [link] (, )
LACEF and CIVEA updates highlight ongoing reforms in local authority enforcement. Polling of Revenues Departments feeds into wider sector reviews, including contributions to CIVEA’s Enforcement News. This is relevant for firms interacting with local authorities or supporting council tax collections.
Water Poverty and Utility Collaboration [link] [link]
Polling shows 46% of older low-income households are reducing toilet flushing to cut bills. Independent Age and CCW are calling for a single national water social tariff. This has implications for collections strategies in utilities, and highlights the growing need for tailored vulnerability support.
Sector Events and Cross-sector Collaboration [link] [link]
A series of sector events in September and October will address themes including AI in collections, regulatory compliance, and customer redress. These forums offer opportunities for firms to align with emerging standards and approaches in debt and credit management.
Key Statistics
- UK inflation in July 2025: 3.8%
- Food inflation: 4.9%, highest since February 2024
- Drop in consumer confidence: -9 to -40 (Jul 2024 – Jul 2025)
- Households missing at least one essential payment in July: 2.1 million
- Households adjusting spending in July: 13.9 million (49%)
- Breathing Space registrations: 8,400, up 14% year-on-year
- DROs in July 2025: 4,001, 78% above long-term monthly average
- StepChange debt advice sessions in July: 14,052, up 4% MoM and 7% YoY
- Online debt advice sessions: 87% of all cases
- StepChange share of Breathing Space since May 2021: 60%
Newsletter Contents
- UK inflation continues to exceed expectations, driven by transport and food.
- Consumer confidence has plummeted to its lowest level since 2024.
- Financial pressure evident in high levels of missed payments and spending adjustments.
- Personal insolvency levels remain elevated, particularly DROs and IVAs.
- StepChange sees increases in advice demand and online session uptake.
- ICO consultations on new data protection requirements under DUAA 2025.
- DUAA impact on vulnerable customer data prompts privacy policy reviews.
- Local authority council tax enforcement under further scrutiny.
- Water poverty prompts renewed calls for a single social tariff.
- MEGA.AI event scheduled for 9 October 2025 in Manchester.
- CSA UKCCC conference set for 11 September 2025.
- Additional events include MALG North East Forum and FourNet compliance roundtable.
Find the full DEMSA newsletter, commentary and links here
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