UK Consumer Confidence Hits 2-Year High

The UK GfK Consumer Confidence Index rose to -14 in August 2026 from -17 in the previous month, marking the highest level in two years despite lingering geopolitical and economic uncertainty. Consumers became more optimistic about the economy and their personal finances over the next 12 months, while more households viewed the current period as a good time to make major purchases. Confidence has rebounded over the past two months, supported by the appointment of new Prime Minister Andy Burnham and easing energy prices. However, rapidly rising inflation is threatening to weigh on sentiment, with consumer prices climbing sharply in July to 2.9%, the highest in four months, driven by higher household energy costs. GfK warned that continued uncertainty surrounding the Middle East and elsewhere, along with persistent cost-of-living pressures, could test consumer confidence in the months ahead.

The UK GfK Consumer Confidence Index rose to -17 in July 2026 from -23 in June, marking the highest level since January and the largest monthly improvement since November 2023. The latest figure was well above market expectations of -21, driven by optimism surrounding Andy Burnham's appointment as prime minister, hopes for easing Middle East tensions at the start of the month, and a boost from the summer weather and the FIFA World Cup. Households' assessment of the economy over the past year improved by 10 points to -39, the strongest reading since late 2024, while expectations for the next 12 months climbed 8 points to -28, the highest since October 2024. Intentions to make major purchases also increased by 8 points to -12, the strongest level this year. However, the survey was conducted before the renewed escalation in the Middle East, while GfK warned that sustaining the "Burnham bounce" will depend on the new government delivering on cost-of-living and economic growth challenges.

The UK GfK Consumer Confidence Index held steady at -23 in June 2026, slightly above market expectations of -24 but unchanged from May. Despite the stable headline reading, GfK Consumer Insights Director Neil Bellamy warned that confidence is weakening beneath the surface as political uncertainty weighs on households. Sentiment among consumers aged 16 to 29 fell sharply by 11 points to -2, its weakest level in two years. Households also grew more pessimistic about their personal finances over the past year, with the gauge dropping three points to -10, while expectations for the year ahead remained subdued at -2. Meanwhile, intentions to make major purchases were unchanged at -20, matching the lowest level since January 2025, suggesting consumers remain cautious about discretionary spending. The survey also showed households' assessment of the economy over the past year deteriorated further, although expectations for the coming 12 months improved modestly.