UK consumer confidence falls as households sense 'stormy conditions ahead'

(Sharecast News) - UK household sentiment retreated in July on the back of consumer worries about inflation and possible tax rises, according to a survey from GfK on Friday. The GfK Consumer Confidence Barometer slipped to -19 this month, down from a six-month high of -18 in June and well below the -13 registered in July 2024.

Sentiment over personal finances held steady over the month, with measures on finances during the last year and over the next 12 months both unchanged at -7 and +2, respectively.

However, the gauges measuring confidence about the past and future general economic situation both fell one point to -44 and -29, respectively.

Additionally, while the major purchase index inched one point higher to -15, the savings index jumped seven points to 34 - its highest since 2007 - suggesting that "some people may be sensing stormy conditions ahead", according to Neil Bellamy, consumer insights director at GfK.

"With speculation growing over possible tax rises in the Autumn Budget, and price pressure contributing not just to higher inflation already but also to the likelihood of worse inflation to come, the news is worrying," Bellamy said.

"Looking at the Overall Index Score of -19 for July, it's difficult to see what will lift it meaningfully higher in the months to come. It has drifted quietly downwards over the past year, and any fresh challenges or shocks could easily push confidence sharply lower."