UK consumer confidence beat forecasts in May at -23, while Irish sentiment rebounded sharply from a 40-month low, though both surveys point to households still firmly on the defensive.
Summary:
Sources: GfK Consumer Confidence Survey (UK); Credit Union Consumer Sentiment Survey (Ireland) – collated by Reuters.
The UK GfK consumer confidence index rose to -23 in May from -25 in April, beating a Reuters poll forecast of -28; April’s reading had been the lowest since October 2023GfK’s major purchase intentions gauge fell two points to -20, its weakest level since January 2025, with lower-income households particularly reluctant to spendA savings measure dropped 10 points, suggesting UK consumers are drawing on reserves to cover everyday expensesGfK consumer insights director Neil Bellamy cautioned that May is unlikely to mark the start of a sustained recovery, citing expected renewed price pressures and interest rate uncertaintyFinance minister Rachel Reeves announced further measures to offset the energy price shock from the Iran war; separate business surveys indicated concerns about a potential change in prime minister were also weighing on sentimentIrish consumer sentiment rose to 59.4 in May from a 40-month low of 53.3 in April, though the reading remains far below the long-term survey average of 83.3The Irish improvement was attributed in part to a Middle East ceasefire announcement and government energy support measures; economist Austin Hughes described the Irish consumer as still nervous, with conditions seen on a weakening path
Consumer confidence edged higher in both the United Kingdom and Ireland in May, but the improvements are doing little to disguise the underlying fragility of household sentiment on either side of the Irish Sea, with the Iran conflict and its associated energy shock continuing to cast a long shadow.
In the UK, GfK’s monthly confidence index rose to -23 from -25 in April. The April reading had been the lowest since October 2023 and was widely attributed to anxieties around the Iran war. May’s recovery beat market expectations by a considerable margin: a Reuters poll of economists had pointed to a reading of -28, and GfK noted that an improvement in the month of May is not unusual given seasonal patterns.
The headline beat, however, masks significant stress beneath the surface. The index tracking willingness to make major purchases fell two points to -20, its lowest reading since January 2025, with households on lower incomes particularly reluctant to commit to significant spending. More telling still, a measure of savings intentions dropped by 10 points, a decline that GfK interpreted as evidence that consumers are raiding savings accounts to fund day-to-day costs rather than building financial cushions.
Neil Bellamy, consumer insights director at GfK, was careful to temper any enthusiasm. With inflation expected to pick up again after its April dip, and interest rate uncertainty still unresolved, he said it would be premature to read May as the start of any meaningful recovery in sentiment. The government moved this week to cushion households further, with finance minister Rachel Reeves announcing additional measures to offset the energy price shock. A separate business survey suggested that speculation about a possible change in prime minister was adding another layer of uncertainty to the economic backdrop.
Across the Irish Sea, the picture was somewhat brighter in relative terms, though the context is equally sobering. The Credit Union Consumer Sentiment Survey climbed to 59.4 in May from 53.3 in April, a meaningful bounce from what had been a 40-month low. The improvement was linked by the survey’s authors to a ceasefire announcement in the Middle East and to Irish government energy support measures, both of which appear to have offered some relief to households bracing for worse.
But the long-term survey average sits at 83.3, leaving May’s reading still deeply depressed by historical standards. Economist Austin Hughes described the Irish consumer as still firmly nervous, with both the broader economic outlook and personal finances seen as on a deteriorating path. The slight improvement, he said, may simply mean the decline will be less severe than previously feared, not that it has been averted.
Taken together, the two surveys offer a picture that is marginally less alarming than feared, but one in which households in both countries remain cautious, stretched, and highly sensitive to any further deterioration in the geopolitical or energy environment.
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Sterling may draw modest support from a GfK reading that came in well above the Reuters poll consensus of -28, though the beat reflects a low bar rather than any genuine brightening in the consumer outlook. The sharp 10-point drop in the UK savings index points to households drawing down reserves to cover day-to-day costs, a dynamic that raises questions about the durability of any demand resilience.
Irish sentiment’s rebound from a 40-month low is similarly fragile, remaining far below its long-run average and contingent in part on ceasefire expectations that could easily reverse.
This article was written by Eamonn Sheridan at investinglive.com.