The British Retail Consortium (BRC) has reported “hints of optimism” in consumer confidence, despite a decline in spending expectations.

Over the next three months, consumer expectations of the state of the economy improved to -32 in January from -38 in December, according to BRC-Opinium data.

Predictions for their personal financial situation also rose to -8 in January, from -10 the month prior.

However, consumer expectations for their personal spending on retail dropped to -6 this month from +6 in December, the organisation found. 

Forecasts for their personal spending overall also fell to +5 in January, from +17 in December.

Consumer expectations for their personal saving grew to +2 in January, compared to -9 the month before.

The trade association’s CEO Helen Dickinson said: “The new year brought hints of optimism, with the second consecutive improvement in consumer confidence in the economy and in people’s own finances. 

“This was the highest in five months, though similar to a year earlier. The contrasting sharp fall in spending expectations, both retail and overall, was expected as the festive season came to a close. 

“This was most keenly felt by Millennials and Gen X, the generations most likely to have children living at home.”

She continued: “January’s renewed optimism is encouraging, but shows just how important it is for Government to build momentum and restore confidence to the levels seen in previous years. 

“With wages still struggling to keep pace with higher costs of living, many people feel as though neither their own finances nor the wider economy is moving forward.

“And if business costs continue to accelerate through 2026—from rising business rates to new regulatory burdens—then the risk is clear: inflation remains stubbornly high, and consumer confidence could falter once again.”

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