Consumer confidence has seen its biggest jump in almost three years, thanks to a mixture of the feel-good factor from the World Cup, a long run of hot weather, and new optimism in the economy as Andy Burnham moved into 10 Downing Street.
The long-running index from market research firm GfK showed confidence climbed six points higher in July to –17.
The largest increase since November 2023, with all five measures looked at by GfK increasing this month.
The biggest gain was recorded in the view of the general economic situation over the past year, which was up 10 points to –39.
Consumers’ opinion of how the economy will perform in the coming 12 months also increased by eight points to –28.
There were also improvements for the personal financial situation of consumers in the past 12 months and year to come.
The major purchase index, giving an indication of spending plans, rose eight points and the savings index was up by seven points.
According to the filing, the sense of a fresh start following the appointment of a new prime minister surely accounts for some of this bounce.
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Neil Bellamy, consumer insights director at GfK, said: “Hot on the heels of the summer heatwaves, July has delivered a wave of optimism.”
The feel-good factor of the Fifa World Cup will have reinforced sentiment, too, and hopes at the start of July that the Middle East conflict might stabilise and bring UK fuel prices down may have also played a role.
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.
They will need to address the ongoing issues of high fuel prices and low economic growth in order to maintain the current level of consumer confidence.
While the current increase in consumer confidence is a positive sign, it’s still too early to tell if this trend will be sustained in the long term.
As the UK government moves forward, consumers will be watching closely to see if the new administration can deliver on its promises and provide a lasting boost to the economy.
