Consumer confidence rises to highest level in nearly three years
GfK’s latest Consumer Confidence barometer shows there has been a slight boost in the nation’s mood in the month of the General Election and Euros.
Consumer confidence in the economy has risen for the fourth consecutive month, according to GfK’s July Consumer Confidence Index, reporting for the first time since the Labour government came into power.
Overall confidence in the economy increased one percentage point to -13 in July, taking it to the highest level since September 2021, suggesting people are feeling slightly more confident post-General Election.
Notably, the major purchase index increased seven points to -16, indicating people are feeling more open to spend money on big ticket items. Perhaps also boosted by the Euros, this is the best figure the Index has seen since February 2022 and significantly improved on the -32 reported for the same time last year.
However, GfK’s client strategy director, Joe Staton, warns there is still an “underlying note of reticence” on the wider economy over the past 12 months, which reported a static score of -32, as well as when consumers look ahead to the coming year (-11). Again, these scores are higher than July 2023, when they were at a gloomy -58 and -33, respectively.
‘Brighter picture’: Consumer confidence inches upward
“Those figures will need to increase before we see positive headline scores,” says Staton. “Nobody can predict when this will happen, especially after the economic and financial battering so many people have experienced in the past three years.”
In spite of this reticence – or perhaps because of – the Savings Index is up five percentage points to 27, indicating people think now is a good time to save as well as spend.
Staton says savvy marketers will be doing the groundwork now by ensuring their brands are in a good position to capitalise on the continued improvement in consumer confidence.
With new PM Keir Starmer promising to “take the brakes off Britain” to drive economic growth and improve living standards, time will tell how this affects future feelings towards the wider economy and people’s personal finances.
