UK consumer confidence index posts biggest monthly rise since November 2023

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UK consumer confidence rises July 2023

Highlights

GfK's UK consumer confidence index rises six points to -17 in July, the largest monthly gain since November 2023 and highest since January.
The survey shows a 10-point jump in households' assessment of the past year's economy to -39 and an eight-point rise in 12-month outlook to -28.
Improved sentiment follows Andy Burnham's election win, temporary fuel price relief, and government plans including a 20% cut in business rates for hospitality venues.

July survey shows broad-based improvement

As reported by Reuters, citing GfK, its consumer confidence index climbs by six points from June to -17 in July, marking the highest reading since January and the largest month-on-month increase since November 2023.

The survey, based on 2,012 responses collected between July 1 and July 14, comes after Andy Burnham wins an election to enter parliament in June but before he becomes Labour leader and prime minister. The poll is also taken before renewed conflict in the Gulf pushes up energy prices and revives investor concerns about inflation pressures.

Neil Bellamy, GfK's consumer insights director, says the prospect of a fresh start in British politics with Burnham replacing Keir Starmer in Downing Street is very likely to account for part of the improvement. He adds that early July hopes for stabilization in the Middle East, lower UK fuel prices and the feel-good effect from the FIFA World Cup also reinforce sentiment.

Political change and consumer outlook

The data aligns with other recent economic indicators, including a temporary slowdown in inflation published shortly after Burnham becomes prime minister on Monday. Since then, his government announces a reduction in tax on electricity bills, a lower cap for bus fares, and a planned 20% cut in business rates for pubs, clubs and live music venues.

Households' assessment of the general economy over the past year jumps by 10 points to -39, the strongest level since late 2024. Expectations for the economy over the next 12 months improve by eight points to -28, the most optimistic reading since October 2024, while intentions to make major purchases rise by eight points to -12, the highest level since the start of the year.

Our earlier article on Andy Burnham’s early weeks in office explained how his reshuffle elevated Labour figures who had been sidelined under Keir Starmer, signalling a significant internal power shift. We noted that while Burnham has pledged to unite the party, removing several Starmer-aligned ministers could deepen factional tensions and shape how his government sets priorities, including on sensitive policy areas such as energy.

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