Key facts
- UK consumer confidence saw its largest monthly increase in nearly three years in July.
- The GfK index rose six points to -17, its highest level since January.
- Factors contributing to the rise include political optimism surrounding Andy Burnham, the England football team's World Cup performance, and hopes for Middle East stability.
- Consumers' outlook for the economy over the next year improved by eight points, and their view of the past year's performance rose by 10 points.
- Despite overall optimism, the outlook for consumers' personal finances saw a more modest improvement of two points.
UK consumer confidence experienced a significant surge in July, marking the largest monthly increase in nearly three years, according to data firm GfK. The "Burnham bounce," attributed to Andy Burnham's byelection victory and his perceived potential to become prime minister, played a key role in lifting spirits. The England men's football team's performance in the World Cup and hopes for a stabilization in the Middle East conflict, potentially lowering fuel prices, also contributed to the wave of optimism.
The GfK index of consumer confidence rose by six points to -17 in July, reaching its highest level since January. Consumers' outlook for the economy over the next year improved by eight points, while their view of the past year's economic performance increased by 10 points. However, the improvement in consumers' personal financial situations was more subdued, rising by only two points.
Neil Bellamy, consumer insights director at GfK, noted the "wave of optimism" but cautioned that current index scores remain well below those seen a decade ago. He stressed that for the "Burnham bounce" to be sustainable, the new UK government must consistently address cost of living challenges and low economic growth. Recent geopolitical events in the Middle East, including renewed conflict between the US and Iran, have sent Brent crude oil prices to $100 per barrel. This rise in oil prices could push inflation higher than previously forecast, potentially impacting efforts to ease the cost of living crisis.