The latest Deloitte Consumer Tracker shows that UK consumer confidence rose to -7.9 % in Q3 2024, its highest level in five years, taking the Consumer Confidence Index to a level last seen before the pandemic, in Q2 2019.
This quarter's result represents the eighth consecutive quarter of upward movement in the Index, and points to consumers feeling more positive about their personal and financial circumstances. The improvement in the Index in Q3 is against a backdrop of a strong labour market, the first cut in interest rates in more than four years in August, growth in real income for over a year, and inflation now below the Bank of England’s 2% target. These improving conditions should create a tailwind for a consumer recovery. Indeed, according to our research some signs of consumer spending bouncing back are emerging. The data shows that net spending on non-essential goods and services rose again in Q3 and is in positive territory for the first time since Q3 2021, when consumers were emerging from the pandemic. At the same time, lower inflation continues to remove the pressures on essential spending, with overall net spending on day-to-day items down for the second consecutive quarter in Q3 2024. However, despite the economy returning to normal levels of growth, UK consumer demand remains weaker than in other advanced economies, and as a result trading is likely to remain subdued in the final quarter of the year. Whether sentiment will continue to improve, with the prospect for consumer spending at Christmas, will depend on what the chancellor announces in the upcoming Budget, whether there is another Bank of England rate cut, and the continued strength of the jobs market.
Net % improvement in confidence in the last three months
Net % spending more in the last three months by category
Source: The Deloitte Consumer Tracker
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Net % improvement in confidence in the last three months
Source: The Deloitte Consumer Tracker
Net % spending more in the last three months by category
Source: The Deloitte Consumer Tracker
Net % spending more in the last three months by category
Source: The Deloitte Consumer Tracker
Net % spending more in the last three months by category
Source: The Deloitte Consumer Tracker