Consumer confidence in the United Kingdom fell in June as the delta variant of the COVID-19 virus spread across the country. From May 27 to June 30, Morning Consult’s Index of Consumer Sentiment in the United Kingdom fell from 85.4 to 81.7, marking the first significant decrease in confidence since the detection of the Brazilian variant in the U.K. on Feb. 28.
Similar to the period following the detection of the Brazilian variant, U.K. consumer confidence rebounded fairly rapidly during the first week of July, ending the day on July 6 at 84.3.
What this means: The rapid recovery in confidence reflects consumers’ growing awareness of the efficacy of existing vaccines in mitigating the most serious public health consequences from the variants, particularly hospitalizations and deaths, and the ability to keep the economy open despite the increase in cases.
The drop in confidence in the U.K. was more pronounced than it was in other European countries, but the growth rate of confidence began to slow across Europe even before the acute decrease in the U.K., signaling there are European-wide issues at play over and above the U.K.-specific increases in the delta strain.
Looking ahead: The slowdown in the growth of consumer confidence in the U.K. is consistent with regional trends observed over the past year, first in APAC, then in the U.S., and now in Europe: Controlling the spread of the virus and reopening the economy provides a momentary boost to consumers, but then comes the hard work of returning to normal. Neither the U.K. nor Europe are quite as far along in their fight against the pandemic as the U.S. or China, but these cross-country comparisons provide useful benchmarks when trying to forecast the future trajectory of consumer confidence and spending in Europe.
John Leer leads Morning Consult’s global economic research, overseeing the company’s economic data collection, validation and analysis. He is an authority on the effects of consumer preferences, expectations and experiences on purchasing patterns, prices and employment.
John continues to advance scholarship in the field of economics, recently partnering with researchers at the Federal Reserve Bank of Cleveland to design a new approach to measuring consumers’ inflation expectations.
This novel approach, now known as the Indirect Consumer Inflation Expectations measure, leverages Morning Consult’s high-frequency survey data to capture unique insights into consumers’ expectations for future inflation.
Prior to Morning Consult, John worked for Promontory Financial Group, offering strategic solutions to financial services firms on matters including credit risk modeling and management, corporate governance, and compliance risk management.
He earned a bachelor’s degree in economics and philosophy with honors from Georgetown University and a master’s degree in economics and management studies (MEMS) from Humboldt University in Berlin.
His analysis has been cited in The New York Times, The Wall Street Journal, Reuters, The Washington Post, The Economist and more.