British consumer confidence experienced a significant rebound in July, with the GfK consumer confidence index climbing six points to -17. This marks the largest monthly increase since November 2023 and brings sentiment back to levels last observed in January. This positive shift is attributed to a combination of factors, including the anticipation surrounding Prime Minister Andy Burnham's new government, a period of warm weather, and the positive morale generated by the FIFA World Cup.
Individual components of the GfK survey showed notable improvements. Households' assessment of the general economic situation over the past year jumped 10 points to -39, reaching its highest level since late 2024. The outlook for the economy in the next 12 months also improved significantly, rising eight points to -28, making it the most optimistic since October 2024. Confidence in personal finances over the next year even edged into positive territory, increasing three points to +1.
The improvement in confidence extended to spending intentions, with GfK's Major Purchase Index, which tracks confidence for buying big-ticket items like cars and appliances, rising eight points to -12. This represents its greatest improvement in months and the highest level since the beginning of the year. The survey, based on 2,012 responses, was conducted between July 1 and July 14, meaning respondents were largely reacting to expectations for Burnham's premiership rather than concrete policy announcements, as he officially entered Downing Street later in July. Neil Bellamy, GfK's consumer insights director, noted that the "sense of a fresh start following the appointment of a new Prime Minister surely accounts for some of this bounce," alongside hopes for stabilizing the Middle East conflict and the World Cup's "feel-good factor."
Despite this strong recovery, Bellamy cautioned that the overall index score of -17 remains within the narrow range seen since late 2023, and it has been a decade since the headline score was in positive territory. For this "Burnham bounce" to be sustainable, he emphasized that consistent delivery by the new UK government will be required to address persistent cost-of-living challenges and low economic growth. However, this early improvement provides an encouraging sign for the new administration, which has already announced measures such as a reduction in tax on electricity bills, a lower bus fare cap, and plans to review income tax allowances.
