GfK Consumer Confidence Rose in the UK in December: Key Factors Behind the Uptick

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After months of uncertainty and economic tension, the latest GfK Consumer Confidence Index shows a glimmer of optimism for UK households.

The index rose to -17 in December 2025, up from -19 in November, beating market expectations and marking a slight but noteworthy rebound as the country headed into the crucial Christmas period.

So, what’s behind this improvement? And what does it really mean for businesses, consumers, and the economy at large?

Let’s break it down.

Modest Uptick, but Confidence Still Under Pressure

The rise to -17 may seem small, but in the context of consumer sentiment, which has been battered by inflation, interest rate hikes, and political instability, any improvement is significant.

While still in negative territory, the two-point jump shows that consumers are feeling a little better than they did just a month ago. This matters because consumer confidence often acts as an early indicator of spending patterns. When people feel more secure about their finances and the economy, they tend to spend more, and that spending helps drive economic activity.

In December, this small improvement likely reflected the seasonal boost in holiday cheer, better-than-expected inflation data, and a clearer picture of fiscal policy after a turbulent autumn.

All Five GfK Indicators Improved

One of the most encouraging signals in the report is that all five components of the GfK survey improved in December. This suggests a broad-based recovery in sentiment, even if it's still fragile.

Here’s what changed:

● Personal financial situation (past 12 months): Improved slightly, as people adjusted to stabilized energy prices and some wage growth.
● Personal financial situation (next 12 months): Also ticked upward, hinting that some households expect a better year ahead.
● General economic situation (past 12 months): Improved modestly, though it still remains negative due to earlier shocks.
● General economic situation (next 12 months): Saw a positive shift as political uncertainty subsided after the budget.
● Major purchase index: Perhaps the most important change, this jumped by four points to -11.

That last item is especially key. It tells us people are feeling more inclined to spend on big-ticket items again, think electronics, furniture, or even a new car. That’s a big change from November, when consumers appeared to hold back during Black Friday despite heavy discounting.

Christmas Sales, Seasonal Hiring, and Consumer Mood

It’s no coincidence that this improvement came just ahead of Christmas.

Retailers across the UK reported stronger-than-expected sales during the last two weeks of December. From department stores to local shops, consumer activity picked up noticeably.

Toys, clothing, and seasonal decorations saw solid demand, boosted in part by seasonal hiring that put extra cash into people’s pockets and nudged them toward discretionary spending.

Entertainment platforms also played a key role in lifting holiday sentiment. The annual Steam Winter Sale, for instance, drew in millions of gamers with discounted video games, creating a surge in digital purchases.

Alongside this, platforms offering live and interactive experiences, including casino live services, saw an increase in user engagement. With many of these platforms offering holiday-specific bonuses, they attracted both new and returning users looking for festive, at-home leisure options.

Even the travel sector benefited. Domestic holiday bookings rose as families, encouraged by limited-time deals, opted for getaways after years of postponements. Together, these factors added momentum to consumer activity and helped brighten the economic mood during the festive season.

Cost-of-Living Remains a Drag

Despite the December boost, the underlying pressures are still there. Energy costs have leveled out but remain elevated compared to pre-2022 levels. Grocery prices, while no longer soaring, continue to squeeze household budgets.

This is why the overall index remains negative, because although some economic indicators are stabilizing, the sense of long-term financial security still feels elusive for many families.

Take, for instance, the housing market. Mortgage rates have come down slightly, but refinancing remains expensive. Renters are dealing with rising lease renewals. These real-world conditions limit how far confidence can rebound.

And let’s not forget the broader uncertainty around the global economy. Trade disruptions, ongoing labor disputes, and geopolitical tensions continue to create volatility that filters down into everyday life.

Budget Clarity Helped Restore Short-Term Stability

One reason November’s numbers were so poor was the lack of clarity around the national budget. There was widespread speculation about tax increases and spending cuts, and that uncertainty weighed heavily on sentiment.

Once the government announced its plans in early December, including support for energy bills and minimal changes to income tax thresholds, some of that fear lifted.

Knowing what’s coming makes it easier for households to plan. And even though the budget wasn’t especially generous, the absence of bad surprises was enough to slightly lift expectations.