GfK Consumer Confidence: July 2019

GfK’s Consumer Confidence measure edged up two points in the month to -11 in July, which is one point lower than a year ago. Four out of five components in the measure improved in the month, with consumers notably more optimistic about personal finances and major purchases.

It is too early to judge whether the optimism will be sustained under the leadership of new Prime Minister Boris Johnson, as improvements in consumer spending power compared to last year ultimately continue to be weighed down by economic uncertainty.

General economic situation

Consumers’ perceptions of the general economic situation over the last 12-months remained unchanged at -32 in July and four points lower compared to last year. The forward-looking component improved by a point to -32 in the month – six points lower than in July 2018.

Personal finances

The backwards-looking personal finances component swung into positive territory at +1 in July, level with the previous year. The forward-looking measure saw a substantial five point improvement to +7 in July, which is also the same as last year.

Major purchases

Having remained fairly muted for months, the major purchases index saw a significant six point increase to +4 in July, up from -2 last year.

Business confidence

Separate data from Lloyds Bank shows that business confidence remained steady in July, with its overall measure at 13%. This remains below its long-term average of 24% (the average since the survey began in 2002).

Although confidence around trade slipped back in July – with the balance of firms expecting stronger trading prospects for the year down by three points to 19% – economic optimism increased by a point to 6%. Overall confidence among retail firms dropped five points to 17%.

Source: GfK

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