Consumer confidence improves in May

Consumer confidence increased in May as turbulence around April’s “Trump tariffs” calmed, but comes amid warnings that inflation could mean relief is short-lived.

GfK’s long-running consumer confidence index increased by three points but remains firmly in negative territory at minus 20.

The improvement was driven by a five-point increase in confidence in personal finances over the coming year to positive two – although still five points worse than this time last year – and a four-point boost in the outlook for the general economy to minus 16 points, worse than last May.

The major purchase index – an indicator of confidence in buying big ticket items – rose three points to minus 16, its highest level since the end of last year.

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CPI

The survey was taken at the beginning of this month, well before official figures on Wednesday showed Consumer Prices Index (CPI) inflation jumped to 3.5% in April, up from 2.6% in March and the highest since January 2024, on the back of “Awful April” household bill rises.

Neil Bellamy, consumer insights director at GfK, said: “Have consumers taken comfort from the Bank of England’s May 8 quarter-point base rate cut?

“And have they breathed a tiny sigh of relief since April when the sudden turbulence of the Trump tariffs was prompting dire warnings of economic damage and a return to inflation?

“Those dangers – especially the issue of inflation – have not disappeared but the consumer mood in the UK does appear to have improved a little.”

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