UK consumer confidence recorded its strongest monthly improvement in almost three years in July, driven by a surge of optimism following Andy Burnham's rise to prime minister, England's World Cup run and favourable summer weather, shows the latest figures by GfK.
The GfK consumer confidence index jumped to -17 from -23 in June, the highest level since January and the largest month-on-month increase since November 2023.
While the uplift offers a positive signal for retailers hoping for stronger consumer spending, analysts warn that persistent cost-of-living pressures, weak economic growth and renewed geopolitical tensions could yet undermine the recovery.
The survey was conducted between July 1 and July 14, after Burnham won an election to enter parliament in June but before he became Labour leader and prime minister. It was also conducted before a renewal of the conflict in the Gulf pushed up energy prices and raised concerns among investors about fresh inflation pressures.
Neil Bellamy, GfK's consumer insights director, said the prospect of a fresh start in British politics with Burnham replacing Keir Starmer in Downing Street was very likely to have accounted for some of the July bounce."
"There were also hopes at the start of July that the Middle East conflict might stabilise and bring UK fuel prices down. The feel-good factor of the FIFA World Cup will have reinforced sentiment too."
The survey chimed with recent economic data, including a temporary slowdown in inflation, published shortly after Andy Burnham became prime minister on Monday.
Since then, Burnham's government has announced a reduction in tax on electricity bills and a lower cap for bus fares.
He also said he would cut business rates for pubs, clubs, and live music venues by 20%.GfK said households' assessment of the general economy over the past year jumped by 10 points to -39, the highest level since late 2024.
Bellamy cautioned that the index scores were still well below the levels seen 10 years ago, before the Brexit vote in 2016, when the headline figure was last in positive territory.
“For the ‘Burnham bounce’ to be sustainable and boost consumer confidence, it will require consistent delivery by the refreshed UK government against deep cost of living challenges and persistent low economic growth," he said.
The outlook for the economy in the coming 12 months was the most optimistic since October 2024, up by eight points at -28.Intentions for making major purchases also rose by eight points to -12, the highest level since the start of the year.The GfK survey was based on 2,012 responses.