UK consumer confidence improves through increased economic sentiment

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The improved economic outlook has boosted UK consumer confidence in May, reversing much of the tariff-induced decline in April, pointing to a more stable expenditure trend.

The GFK Consumer Trust Index — a measure of how people view their finances and broader economic outlook — rose three points in May to 20 to 20, the research group said Friday. The score returned to the level recorded in February, but was well below the average of minus 5.6 from 2015 to 2019.

The May increase was driven by improved economic outlook and personal financial sentiment, suggesting that households may be regaining motivation to spend some. Consumption in households, which accounts for around 60% of UK GDP, contributed little to first quarter growth despite the economy expanding 0.7%.

Neil Bellamy, GFK’s director of consumer insights, said consumers “have had a small sigh of relief” since the turbulence sparked by President Donald Trump’s warning of a return to tariffs and inflation in April.

“Though these dangers, especially the issues of inflation, have not disappeared, the UK’s consumer mood appears to have improved a little,” Bellamy added.

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The GFK survey, which was answered in the first half of May, reflects consumer perceptions of news events such as BOE rate reductions and UK contract agreements with the US and India, and discussions with the EU. However, data released this week showed that inflation rates rose to 3.5% in April, urging traders to cut expectations for further interest rate cuts.

The outlook for the personal finance survey rose five points, and the economic outlook for this year rose four points to minus 33.

It also showed that a high percentage of people say they felt it was a good time to spend on big items like furniture and electrical appliances while their savings intentions were declining.

Another consumer survey issued on Thursday by the UK Retail Consortium also showed an increase in the percentage of people expecting the economy to improve in May compared to the previous month. Also, more people were hoping for better personal finances.

“We’re looking forward to seeing you in the future,” said Helen Dickinson, CEO of BRC. “Just a few weeks ago, consumers faced uncertainty resulting from President Trump’s announcement of eye-catching tariffs in many countries. Today, the UK is trading with some of the world’s largest economies.”

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