Consumer-driven rebound forecast as confidence returns to pre-pandemic levels

UK consumer confidence returned to pre-pandemic levels in the second quarter of 2021, rising by two percentage points from the previous quarter, according to a study out today.

The latest Deloitte consumer tracker has revealed that confidence is at its highest level since the final three months of 2019 and increased by a record nine percentage points year on year, albeit from a low base in the second quarter of last year.

Deloitte said its analysis is based on responses from more than 3,000 UK consumers who were surveyed between June and 18 and 21.

The accountancy giant found that consumers were not only more confident about their own circumstances, but were also “significantly” more optimistic about the state of the UK economy. Sentiment around this grew by 23 percentage points from the previous quarter.

Deloitte expects the six months between April and September to deliver greater growth than in the four years before the pandemic. Picture: Hollie Adams/Getty Images.

For consumers, confidence in job security has risen by four percentage points compared to the previous quarter. Turning to discretionary spending, this increased by 19 percentage points between April and June, with about four in five respondents disclosing that they have saved money over the course of the pandemic. Of these, 58 per cent intend to spend more on holidays, eating and going out, and clothing, over the next three months.

Debapratim De, senior economist at Deloitte, said the “stage is set for a consumer-driven rebound in activity”. He added: “We expect the six months between April and September to deliver greater growth than seen over the four years before the pandemic.”

However, Deloitte also flagged concerns about firms being able to adapt to increased demand, managing “scarce staffing resource”, for example.

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