GfK’s headline consumer confidence score improved by three points this month, but that doesn’t mean cost of living pressures have dissipated.
Consumer confidence has improved this month, providing some “welcome rays of sunshine” despite persistent pressures on the public’s wallets.
This is according to GfK’s Consumer Confidence Barometer, which recorded a three-point increase in its headline measure, which brings together different individual measures in consumer confidence. However, headline consumer confidence still remains firmly in the negatives, at -20, up from -23 in April. This, however, remains below what it was in May 2024, when it was -17.
The individual measure that saw the most improvement was consumers’ perceptions of their own personal financial situation over the next 12-months. This future-facing measure improved by five points, up to two from -3 last month. Again, this remains below last year’s figure of seven.
Out of all the measures that make up the overall consumer confidence index, only consumers’ views of their personal financial situations looking to the next year are in positive territory, although all measures did see improvement. Consumers’ views of the general economic situation over the next 12 months improved by four points to -33, while their retrospective view about the general economic situation over the last year improved by one point to -46. The major purchase index also improved, rising three points to -16.
The savings index, which is recorded but doesn’t count as part as the overall index score, was the only measure GfK reports on to decline. This metric fell two points to 28 this month.
Commenting on the improved measures, GfK consumer insights director Neil Bellamy says the figures provide welcome news for marketers in the UK.
“With summer just around the corner, we already have some welcome rays of sunshine. Consumers are more positive about the future,” he says.
Bellamy notes that consumers’ may have taken comfort from the Bank of England’s quarter-point base-rate cut early in the month, or indeed from more stability following the turbulence brought by President Trump’s tariff announcement in April.
We all know those cost-of-living pressures are still with us – inflation has certainly not gone away.
Neil Bellamy, GfK
GfK conducted the interview for the figures between 1 May and 14 May, so before yesterday’s (21 May) announcement that inflation in the year to April had jumped to 3.5%, its highest level since February 2024.
Bellamy acknowledges that “dangers”, including inflation, were far from gone for consumers.
“We all know those cost of living pressures are still with us – inflation has certainly not gone away,” he says. “But can we tap that brighter mood, give the consumer something to celebrate and enjoy over the summer months?”
The key challenge for brands going forward will be to provide consumers with whatever it is they need to feel the confidence to spend with their business, even as the economic backdrop continues to be tough.
