Consumer confidence surpasses pre-pandemic levels

Consumer confidence increased to -7 this month, according to GfK’s Consumer Confidence Index, which is ahead of pre-pandemic levels previously reported. 

The index measuring changes in personal finances over the last year was -1, an increase of three points against July 2020, while the forecast for personal finances over the next 12 months stayed the same at +11, 11 points higher than this time last year.

Meanwhile, the measure for the general economic situation of the country during the last 12 months is up four points at -43, 18 points higher than in July 2020. While expectations for the general economic situation over the coming 12 months have dropped by three points to -5, this was still 36 points higher than July 2020.

The Major Purchase Index has increased by seven points to +2 in July; this is 28 points higher than it was in July of last year.

Joe Staton, client strategy director GfK, said: “Consumer confidence edged ahead of its March 2020 pre-lockdown headline score by two points to -7 in July. This means it has now held firm or improved for six months in a row. Personal finance expectations for the next 12 months remain strong and there’s a dramatic jump this month in our major purchase sub-measure with shoppers agreeing that now is the ‘right time to buy’.

“The healthy seven-point rise in the major purchase measure aligns with strong retail growth figures that reflect the gradual unlocking of the UK high street and release of pent-up demand as Brits hit shops, restaurants and venues.” 

He added: “However, threats from increasing consumer price inflation, rising COVID infection figures, and the looming end of furlough and the Job Retention Scheme could put the brakes on this rebound.

“Consumers are aware of these pressures, judging by the latest fall from -2 to -5 in their view of the general economy in the coming 12 months. What happens across the remaining summer months will frame consumer confidence for the rest of 2021 and beyond.”