Consumer confidence is on the up as the UK economy begins to improve and tensions in the US-China trade war ease off, a new survey has found.
The over-60s saw the biggest boost in confidence although they remain the most pessimistic of any generation, according to the index from the British Retail Consortium (BRC) and Opinium.
“Only weeks ago, consumers were facing uncertainty arising from President Trump’s announcement of eye-watering tariffs on many countries,” said Helen Dickinson, CEO of the BRC.
“Fast-forward to today, the UK has trade deals with some of the world’s largest economies.”
The latest confidence survey does not reflect the UK’s new deal with the EU, although does include the impact of trade agreements with the US and India. The BRC said these likely contributed towards the boost in confidence.
The UK’s economy is beginning to show signs of improvement and grew by 0.7% in the first three months of 2025, according to official figures, more than expected.
A survey of economists by Reuters this week found on average the UK economy is expected to grow by 1% this year.
“The UK government is massively increasing spending this year,” said James Smith, economist at ING. “There’s a lot of money coming in and that’s going to act as a bit of a tailwind as well. Real wage growth is also still quite strong, so the economy still has some reasonable underpinnings.”
Dickinson said there is more the UK can do to encourage spending though, including the reintroduction of a tax-free shopping scheme to attract more high-value shoppers from abroad. This would benefit retail, hospitality, and leisure, and create employment opportunities and boost economic growth, she said.
According to confidence index, Brits’ expectations for their overall personal spending remained at the same level for the third consecutive month, while the index for expected spend in retail ticked down.
The survey took place at the start of May, just after dramatic increases on water bills, energy costs and council tax pushed April’s inflation rate up to 3.5%.
This was higher than expected and means the Bank of England is less likely to press ahead with major cuts to interest rates.
This month, the Bank of England warned the UK economy would experience a short-term inflationary burst and predicted the rate would still be 3.5% in the summer.
No comments yet