‘Wave of optimism’ is sparked by prospect of new PM, England football team’s progress and hot weather
Consumer confidence in the UK jumped this month by its biggest margin for nearly three years as the prospect of Andy Burnham becoming prime minister became almost certain.
The data company GfK said a “Burnham bounce” along with a strong run by the men’s England football team at the World Cup and sunny weather had lifted the mood of consumers in its long-running monthly survey.
Burnham’s byelection victory on 18 June, which put the former mayor of Greater Manchester in pole position to take over from Keir Starmer, was credited with helping to improve consumers’ outlook for the economy over the next year by eight points.
Their view of the economy’s performance over the previous year also improved by 10 points. The overall score in the GfK index increased by six points to -17 in July, the highest level since January and the biggest rise since November 2023.
The prospect of an end to the conflict in the Middle East was also seen by consumers as a reason to be cheerful.
Neil Bellamy, consumer insights director at GfK, said July had delivered “a wave of optimism”.
He added: “The sense of a fresh start following the appointment of a new prime minister surely accounts for some of this bounce.
“There were also hopes at the start of July that the Middle East conflict might stabilise and bring UK fuel prices down. The feelgood factor of the Fifa World Cup will have reinforced sentiment too.”
But the increase was held back by a more circumspect view by respondents of their own personal financial situation. Although all five indices in the report showed an improvement, the outlook for consumers’ personal finances rose by just two points.
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.”
Burnham’s plans could be undermined by recent events in the Middle East, where the US conflict with Iran has been reignited, sending the price of a barrel of Brent crude up to $100.
Economic forecasters had estimated that inflation, which fell back to 2.6% in June from 2.8% in May, was likely to spend the rest of the year climbing again before reaching a peak near 4% in November.
However, these forecasts were made before the recent sharp rise in oil prices, which could push inflation higher and dent initiatives to ease the cost of living.
Source: The Guardian World — This article was automatically imported from the source. Read full article at original source →
