Consumer Confidence Hits Two-Year High as Spending Rises 2026

Consumer confidence hit its highest level in almost two years in July, according to research that indicated the closing stages of the men’s football World Cup and more people holidaying in the UK lifted summer spending. The Barclays monthly survey revealed a 21-month high in confidence, with 30% of respondents feeling positive about the UK economy. This uptick signals a broader recovery in consumer sentiment, driven by major events and a shift toward domestic travel.

Key Drivers Behind the Consumer Confidence Surge

The truce in the Middle East conflict in June and the arrival of a new prime minister in No 10 also gave a lift to consumers after a long period of heightened uncertainty. These political and geopolitical stabilizers helped ease anxieties, allowing households to focus on discretionary spending. As a result, consumer card spending grew by 2% year on year in July, following a 1.9% increase in June.

World Cup and UK Holidays Boost Summer Spending

Among the biggest beneficiaries were pubs, which enjoyed a 10% increase in transactions “thanks to England’s World Cup run.” It was estimated that the tournament brought in £150m in added sales for British pubs. Meanwhile, card spending at cinemas rose 2.6%, helped by the popularity of Toy Story 5 and The Odyssey – the highest grossing movie of filmmaker Christopher Nolan’s career. The heatwaves also depressed spending on airline tickets in favor of domestic holidays, pushing up spending on UK accommodation by 2.6%.

Discretionary Spending and Job Security

The bank said the study showed people felt more secure in their jobs and had more leeway to spend on non-essentials, with discretionary spending up 1.6%. This confidence extended beyond the UK, as Barclays noted that confidence in the European economy also climbed by six percentage points to 35% – the highest level recorded since the bank started tracking this measure in 2015.

Retail Sector Mixed Results

A separate report by the British Retail Consortium found that while many shops were lifted by the rise in consumer confidence, others were left behind. Food sales were buoyant, increasing by 3.8% year on year in July, broadly in line with growth of 3.9% in July 2025. Clothing retailers also benefited from a summer boost, though non-food categories showed varied performance.

Implications for Businesses and Investors

This rise in consumer confidence suggests a more optimistic outlook for the UK economy, potentially leading to increased retail sales and hospitality revenues. Businesses in the leisure and travel sectors should note the shift toward domestic spending, while retailers may see continued strength in food and clothing categories. For investors, this could signal a favorable environment for consumer discretionary stocks.

Key Takeaways

• Consumer confidence hits a 21-month high, with 30% feeling positive about the economy.
• World Cup and UK holidays drove a 10% surge in pub transactions and a 2.6% rise in accommodation spending.
• Discretionary spending grew 1.6%, reflecting improved job security.
• European consumer confidence reached a record 35%.
• Food sales remain robust, but non-food retail shows mixed results.

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