Consumer confidence improves amid easing trade tensions

UK consumer sentiment has improved after months of record-low confidence, according to new data from Dentsu.

The marketing agency’s upcoming consumer navigator report indicated a potential turning point for the UK economy, amid easing trade tensions and a cut in interest rates.

Confidence in the UK economy notably improved at the end of May, with 28% of consumers describing it as in good or excellent shape, compared to less than 20% three months before.

The shift represents a significant improvement from the prior “awful April” period, when 80% of Brits viewed the economy negatively.

Gen Z were the most optimistic, with 51% saying that the economy was performing well, compared to 35% in the previous quarter.

However, 58% of boomers said they expected things to get worse, with 18% saying they would be “significantly worse”.

While 58% of consumers said they believed the economy would remain stable or improve over the next six to 12 months, 47% still reported struggling to afford many of their expenses, with the figure remaining unchanged from earlier this year.

Dentsu CEO UK&I Annette Male said: “We’re seeing early signs of a shift in consumer sentiment. While challenges remain, there’s a cautious return of optimism—especially among younger generations.

“Although a small change, marketers will be encouraged to see consumers feeling more confident about the future with an appetite to increase their spending, but brands should remain sensitive to the financial pressures their customers continue to face.”

In May, the PwC’s spring 2025 data reported that consumer sentiment had dropped from -8 in January to -12 by the end of March — marking its lowest level since September 2023 and the lowest under the new government.

However, retail sales rose for the fourth consecutive month in April, according to the Office for National Statistics (ONS), as consumer confidence in the UK improved.

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