Consumer confidence improves in July

GfK’s consumer-confidence indicator rose to -17 in July, returning to levels last seen in January.

All measures tracked by the survey improved, including expectations for the general economy and intentions to make major purchases. The World Cup and the Prime Minister’s promises of help with living costs appear to have improved the national mood. However, renewed increases in oil, mortgage and energy costs mean the recovery in confidence may be fragile. All five measures rose compared to last month’s announcement.

Neil Bellamy, Consumer Insights Director at GfK, an NIQ Company, said “Hot on the heels of the summer heatwaves, July has delivered a wave of optimism. This month’s six-point jump to -17 marks the largest increase in consumer confidence since November 2023. The lion’s share of the improvement is in the economy, with a ten-point advance in how consumers view the past year and an eight-point gain for the next 12 months.

“Motivations to make major purchases are also up eight points. The sense of a fresh start following the appointment of a new prime minister surely accounts for some of this bounce. There were also hopes at the start of July that the Middle East conflict might stabilise and bring UK fuel prices down. The feel-good factor of the FIFA World Cup will have reinforced sentiment too. However, July’s improved Overall Index Score remains within the narrow range seen since the end of 2023, and it is a decade since the headline score was in positive territory. For the “Burnham bounce” to be sustainable and boost consumer confidence, it will require consistent delivery by the refreshed UK government against deep cost-of-living challenges and persistent low economic growth.”