UK Consumer Confidence Rises as German Sentiment Plummets

Consumer sentiment in Europe diverged sharply in September 2026. In the United Kingdom, GfK reported that consumer confidence rose to -13, the highest level since August 2024. This increase surpassed economist expectations and was driven by an eight-month high in personal finance optimism and a stronger general economic outlook. Other indicators from YouGov/Cebr and LSEG/Ipsos similarly showed peaks not seen since February.

Conversely, German consumer confidence fell unexpectedly to its lowest level since May. The consumer-climate index for the October forecast dropped to minus 30.6 from minus 26.8 in September, exceeding economist predictions of minus 27.2. This decline was triggered by rising energy prices following renewed U.S. strikes on Iran and escalating tensions in the Middle East, leading to the lowest personal income expectations since April.

While the Ifo Institute reported a three-year high in German business sentiment, the broader eurozone faced higher energy costs, prompting the European Central Bank to raise key interest rates. In response to the pressure on households, the Federal Government of Germany introduced a temporary tax rebate for fuel. Despite the recovery in the UK, GfK warned that rising inflation and fuel prices could cause sentiment to falter as the headline score remains in negative territory.