U.K. online fashion retailer Asos has reported a big loss as its customers spend less on fashion due to the rising cost of living. The BBC reports the firm saw a loss of nearly £32 million ($36 million) in the 12 months to August, compared with a profit of £177 million last year.

The firm expects shoppers to cut back further this year as living costs soar. Inflation returned to a 40-year high in September, and BBC research showed people are feeling increasingly anxious about their finances.

CNN reported Oct. 19 that Goldman Sachs had downgraded its economic outlook for the U.K., forecasting “a more significant recession” in which activity contracts by 1% in 2023. U.K. prime minister, Liz Truss, resigned Oct. 20 after weeks of criticism of her economic policies, causing “relief” in the markets, but still a great deal of uncertainty, BBC News reports.

Asos, which owns main-street chain stores Topshop and Topman, said it was facing "an incredibly challenging economic environment" at the moment. The retailer said it expected to make a further loss in the six months to the end of February, in part due to having to cut prices to clear stock.

Asos and its rival Boohoo, which were seen as a poster children for the shift to online shopping, benefited during the pandemic as locked-down shoppers splashed out online. But they have struggled as people have returned to stores.

Asos said in June that cash-strapped consumers were also returning more items bought online, hitting its profits.