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‘Burnham bounce’ risks deflating unless focus remains on struggling households | Richard Partington
UK consumer confidence rose at its fastest monthly pace in almost three years in June, a shift data firm GfK partly attributes to Andy Burnham's return to Westminster politics, alongside sunshine and England's World Cup run. The improvement matters because household spending makes up around 60% of the UK economy, so any lift in sentiment could help high streets, service providers and builders. However, columnist Richard Partington cautions this "Burnham bounce" may not last unless policy keeps focusing on struggling households, given deep and widening inequalities in how different groups experience the economy.
Burnham's measures include a temporary VAT cut on electricity bills in Great Britain from October, a £2 cap on bus fares across England, and a 20% cut in business rates for pubs, clubs and live music venues, alongside inflation falling to 2.6%. Yet GfK data shows over-65s are gloomier than 16- to 29-year-olds despite record youth unemployment, and official figures reveal the richest fifth of households increased weekly spending twice as fast as the poorest fifth (up £98.10, or 10%, to £1,083.60 versus £18.10, or 5%, to £407.30) in the year to March 2025, with overall prices up more than a quarter since the 2021 cost of living crisis began.
In short
- Consumer confidence jumped after Burnham's return, aided by weather and football
- Household spending drives 60% of UK economy, so sentiment matters
- Richest households' spending grew twice as fast as poorest's
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The case for
The consumer confidence rise reflects tangible policy improvements—inflation falling to 2.6%, VAT relief on energy bills, capped bus fares, and business rates cuts targeting specific groups. These represent real household relief, not merely psychological. If these policies continue and strengthen, they can sustain the bounce and translate into broader improvement. Job creation from increased spending can further secure household finances across different groups, creating a virtuous cycle that benefits struggling households.
The case against
The bounce risks proving ephemeral given widening inequality evident in the data itself. The richest households are spending twice as fast as the poorest, whilst measures aimed at over-65s haven't lifted their sentiment, suggesting policies aren't reaching those most vulnerable. Most announced support is temporary rather than structural. Without fundamental policy shift addressing inequality and sustained commitment to struggling households' core needs, the bounce will deflate as initial novelty fades and underlying economic anxieties resurface.
Explained simply
Consumer confidence in the UK has risen significantly in recent months, reflecting improved household sentiment about the economy. This matters because consumer spending accounts for roughly 60 per cent of the UK economy, so changes in how optimistic people feel about their finances can affect high streets, restaurants and builders across the country.
Andy Burnham, a senior political figure, has recently introduced policies intended to ease financial pressures on households and small businesses. These include a temporary cut to electricity bill taxes, a cap on bus fares and reduced business rates for pubs and music venues, alongside inflation falling to 2.6 per cent. Together, these measures appear to have contributed to the shift in public mood.
However, the improved sentiment may not be reaching everyone equally. Older people remain less optimistic than younger people, whilst wealthier households have increased their spending twice as fast as poorer ones in recent years. This variation in how different groups experience the economy means the benefits of improved confidence are not being felt uniformly.
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