UK consumer confidence hits 21-month high amid summer spending boost

UK consumer spending and confidence saw a notable boost in July, driven by the FIFA World Cup, summer heatwaves, and a rise in domestic staycations. According to Barclays, consumer confidence in the UK economy reached a 21-month high, with 30% of those surveyed expressing optimism. Card spending grew by 2% year-on-year, supported by a 10% increase in pub transactions linked to England’s World Cup run and a 2.6% rise in cinema attendance.

Data from the British Retail Consortium (BRC) showed total retail sales increased by 1.3% year-on-year, though this was a slowdown from June. Food sales rose by 3.8%, while non-food sales fell by 0.7% as shoppers avoided high streets during heatwaves. While clothing and garden accessories saw growth due to the weather, consumers remained cautious regarding big-ticket items like furniture and computing.

Despite the summer uplift, economic concerns persist. Analysts warned that rising food supply chain pressures and potential construction sector stagnation could impact broader GDP growth. Additionally, while domestic accommodation spending rose by 2.6%, airline spending fell by 6%, indicating a continued preference for staycations over international travel.