UK consumer confidence rises to joint-highest of year, GfK says

The mood among UK consumers improved in December, with sentiment reaching its joint-highest level of the year. GfK’s latest Consumer Confidence Index rose two points to −17 — matching the highs recorded in August and October — and marking a modest year-end lift in household morale.

The index, based on interviews with around 2,000 adults between 1 and 11 December, showed improvement across all five of its key components. Personal finances, the general economic outlook, and the major purchase measure each recorded month-on-month gains, while the savings index held steady at a historically elevated level of +24.

The survey’s results indicate that household confidence is stabilising after a year marked by high living costs and subdued wage growth. The headline score, however, remains unchanged from December 2024, underlining the limited progress in restoring optimism since the cost-of-living crisis peaked two years ago.

Neil Bellamy, Consumer Insights Director at GfK, said the December uptick may reflect relief that the Autumn Budget “was not as severe as feared.” He noted that a four-point rise in major purchase intentions — to −11 — suggests some appetite for discretionary spending despite muted Black Friday trading.

“Consumers resemble a family on a festive winter hike, crossing a boggy field — plodding along stoically, getting stuck in the mud and hoping that easier conditions are not far off,” Bellamy added.

The index’s personal finance measures showed the most resilient readings of the year. The view of household finances over the past 12 months edged up one point to −6, while expectations for the next year climbed to +2 — the first positive reading since the pandemic. Sentiment toward the general economy also improved slightly, though both backward- and forward-looking measures remain deep in negative territory at −40 and −29 respectively.

The report follows the Bank of England’s December rate cut, which came amid a slowdown in consumer price inflation to its lowest level since March. Together with the Autumn Budget’s modest tax adjustments, those factors have helped temper pressure on household finances heading into the new year.

Economists said the data offers a cautiously positive signal for retailers and the broader services sector as they enter the first quarter of 2026. However, they warned that sentiment remains fragile, with consumers likely to prioritise saving over discretionary spending until wage growth and employment conditions strengthen further.

GfK’s survey suggests that, for now, households are “plodding forward” rather than accelerating — a sign of resilience, but also of restraint, as Britain closes a year of economic adjustment.