The UK’s Consumer Confidence Index experienced a modest rise in July, moving up one point.
- Despite the increase, the index remains in negative territory, standing at -13.
- A seven-point increase in the major purchase index could signal future retail growth.
- Personal financial situations improved slightly, while economic expectations remained unchanged.
- External events like political changes and sports achievements had limited impact on sentiment.
The UK’s Consumer Confidence Index edged up by one point in July according to research from GfK, an established market research entity. Despite this slight improvement, the index continued to reflect a negative outlook, being positioned at -13. The research, which has been ongoing, indicated that although there was a slight uptick, the overall sentiment remains cautious as it also showed a significant improvement from the previous year, where the index was at -30.
The performance of different measures within the index was varied. Specifically, the personal financial situation over the past 12 months saw an improvement of two points. This change suggests a cautiously optimistic view among consumers regarding their financial circumstances. More notably, the major purchase index rose by seven points, potentially indicating a positive trend for retailers, as this could result in increased consumer activity in the retail sector in the coming months.
Conversely, the personal financial outlook for the coming 12 months saw a decline by one point, suggesting ongoing uncertainty about future economic conditions. Further, the research explained that external events, such as the United Kingdom’s general election results and England’s performance in the UEFA Euro 2024 Final, were anticipated to influence consumer sentiment more strongly, yet they had a minimal positive effect on the index.
Joe Staton, GfK’s client strategy director, stated that the marginal improvements in certain indices are encouraging. “There was a subdued one-point improvement in the Overall Index Score in July with only two of the five measures increasing,” he remarked. Additionally, Staton noted that the positive views on personal finances recorded in July were the most favourable since January 2022, demonstrating a slight recovery in consumer trust.
A survey conducted with a sample group of 2,005 individuals over the age of 16 across the UK provided these insights. The cautious sentiment suggests that consumers are in a “wait and see” mode, carefully considering the potential impacts of the new government’s economic policies on their finances.
Overall, the slight rise in consumer confidence indicates cautious optimism amidst uncertain economic conditions.
