UK consumer confidence remains buoyant

By

Nigel TAYLOR

Published
Jul 23, 2021

UK consumer confidence finally edged ahead of its March 2020 pre-lockdown score by two points in July with shoppers in a spending frame of mind.

It was still negative at -7, but it's held firm or improved for six months in a row, GfK’s Consumer Confidence Index showed Friday. 

More interesting news was that personal finance expectations for the next year remain strong with a “dramatic jump this month in our major purchase sub-measure with shoppers agreeing that now is the ‘right time to buy’”, said GfK’s Client Strategy director Joe Staton.

Overall, July’s index showed two measures were up in comparison to last month, two measures were down, and one stayed the same.

The Major Purchase Index increased by seven points to +2, and that was a massive 28 points higher than it was this month last year, “reflecting the gradual unlocking of the UK high street and release of pent-up demand” as Britons hit shops, restaurants and venues.

The index measuring changes in personal finances over the last 12 months was down one point at -1 but remained three points better than July 2020. And the forecast for personal finances over the next 12 months stayed the same month-on-month at +11, some 11 points higher than this time last year.

The measure for the general economic situation of the country during the last 12 months rose four points month-on-month at -43, that’s 18 points higher than in July 2020, while expectations for the general economic situation over the coming 12 months dropped by three points to -5 compared to June, still 36 points higher than a year ago.

Finally, The Savings Index slipped one point month-on-month to +20 in July, one point lower than this time last year.

However, Staton warned that “threats from increasing consumer price inflation, Covid variants and rising infection figures, the looming end of furlough and the Job Retention Scheme, could put the brakes on the rebound". 

He added: “Consumers are aware of these pressures judging from the latest fall – from -2 to -5 – in how they view the general economy in the year ahead. What happens across the remaining summer months will frame consumer confidence for the rest of 2021 and beyond”.