UK Consumer Confidence Improves for Second Month

The UK GfK Consumer Confidence Index fell to -21 in March 2026 from -19 in February, marking its lowest level in nearly a year as concerns over the Middle East conflict’s impact on inflation and growth weighed on sentiment. The largest decline came in households’ assessment of the general economic outlook for the next 12 months, which dropped 6 points, while views of personal finances remained steady. The report also showed a 4-point fall in willingness to make major purchases and a 6-point rise in the savings rate. British consumers faced surging energy costs, with petrol prices up roughly 50% since the Iran war began, while government support for households reliant on heating oil remained limited. Neil Bellamy, Consumer Insights Director at GfK, said: “People simply do not feel the economy is robust enough to ride out the knock-on effects from the Middle East conflict.”

The UK GfK Consumer Confidence Index fell to -19 in February 2026 from -16 in January, reversing the gains recorded over the previous two months and undershooting market expectations for an improvement to -15, as rising unemployment weighed on sentiment. The jobless rate climbed to a post-pandemic high of 5.2% in the three months to December, while youth unemployment surged to 16.4%, its highest level in over a decade. Neil Bellamy, Consumer Insights Director at GfK, said the trend “is increasing concerns about job security, particularly given the backdrop of weak wage growth.” He added that “with fewer entry-level opportunities available, those on lower incomes are already feeling the strain and this trend risks undermining the typically more optimistic outlook held by younger age groups.” The overall decline was largely driven by deteriorating views of personal finances, with respondents reporting a four-point drop in assessments of both the past year and the year ahead.

The UK GfK Consumer Confidence Index edged up to -16 in January 2026 from -17 in December, pointing to household resilience rather than renewed optimism, as the broader economic outlook remains subdued. The latest reading also marked 10 years since the index last stood in positive territory. Confidence in personal finances over the next 12 months rose four points to +6, eight points higher than a year earlier. By contrast, expectations for the general economic situation over the coming year slipped two points to -31, though this remains three points above last January’s level. The Major Purchase Index, which gauges sentiment toward big ticket spending, improved by one point to -10, standing 10 points higher than a year ago. Commenting on the data, GfK Consumer Insights Director Neil Bellamy noted that despite the one point improvement in headline confidence, consumers remain far from feeling that an economic turnaround is imminent.