UK consumer confidence has turned positive for the first time in five years, according to the Autumn 2026 edition of PwC’s Consumer Sentiment Survey, and the firm’s retail team is using the moment to deliver a blunt instruction to shops: start Christmas now, because the good mood is unlikely to survive the autumn. PwC’s index climbed to +1 in August from -13 in April, its highest reading since September 2021 and two points above January. The result was reported on 13 and 14 September by The Grocer, Drapers, Retail Technology Innovation Hub and KamCity, and is published in full on PwC UK’s own site.
The headline number is modest. What matters for a high street or an independent shop is the direction, the breadth and the timing. Sentiment improved across every age group and every socio-economic group, household finances are at their strongest in four years, and the balance of people planning to spend more on Christmas has, for the first time since the pandemic, overtaken those planning to spend less. PwC’s own caveat is just as important: food and fuel inflation, a 28 October Budget and rising rent and job worries among the under-35s all point to purse strings tightening before the “golden quarter” actually arrives.
In short
- Index at +1: PwC’s Consumer Sentiment Index rose to +1 in August 2026 from -13 in April, the first positive reading since September 2021 and the highest in five years.
- Finances repaired: 39% of UK adults now describe their finances as “healthy” with money left at the end of the month, up from 27% in September 2022; those “struggling” or “in trouble” fell from 28% to 12%.
- Christmas has started: 14% had begun festive shopping by mid-August, a further 16% plan to shop earlier than last year, and 25% expect to spend more this Christmas against 21% who expect to spend less.
- Caution persists: 85% still worry about the rising cost of everyday things, 68% plan short-term cutbacks, and job and housing worries among 18 to 34-year-olds rose sharply since January.
- The advice: PwC’s head of retail, Jacqueline Windsor, says the “golden period of consumer confidence may have come too early for the golden quarter” and urges retailers to “strike early with Christmas before purse strings tighten”.
What did the PwC survey actually find?
PwC’s Consumer Sentiment Index asks a single core question: thinking about your disposable income in the next 12 months, do you think your household will be better off, worse off or about the same? The score is the net balance of optimists over pessimists. The Autumn 2026 edition is based on a survey of 2,070 UK adults conducted in the second week of August, according to the firm’s published methodology.
The index came in at +1. That compares with -13 in April, when PwC says conflict in the Middle East prompted widespread fears about household costs, and with -1 in January. The long-run average of the series, which began in 2008, is around -15, so a reading of +1 is comfortably above the norm even if it looks like a rounding error in isolation. PwC describes the reading as the index being “back on the improving trend that started at the beginning of 2025”, with the April dip now looking like an interruption rather than a change of course.
Two drivers stand out in PwC’s analysis. First, Office for National Statistics data shows average earnings have risen faster than overall inflation since January, and faster than food inflation in particular. Second, inflation expectations have fallen since April. PwC notes that food inflation tends to influence sentiment more than any other price because consumers feel it every week at the till; when the weekly shop stops getting noticeably dearer, the mood improves quickly.
The 35 to 44 age group posts a record
Sentiment rose in every age group, but the standout figure is the +21 recorded by 35 to 44-year-olds, the highest score for any age group since the survey began in 2008. This cohort is typically the most exposed to mortgage costs, childcare and the weekly food bill, which makes its optimism a useful signal for mid-market retailers, family grocers and anyone selling into households with children. PwC says older families, pensioners and the less well off, the groups most squeezed by the cost of living, have seen the biggest improvement in their finances.
A five-year high, but only just positive
The last time the index sat above zero was September 2021, in what PwC calls the tail end of the Covid pandemic, when accumulated lockdown savings were still flattering household balance sheets. The reading then fell through 2022 as energy prices surged and has spent most of the period since in negative territory. Drapers reports that confidence “has returned to positive territory, but retailers face a race against rising autumn costs to capture spending ahead of Christmas”, which captures the tone of the release well.
How healthy are UK household finances now?
The most striking part of the survey is not the headline index but the finances question. PwC asks people to place themselves on a scale from “healthy” (money left over at the end of the month for luxuries and savings) through “OK” and “struggling” (difficulty paying bills) to “in trouble” (missing payments). In August 2026, 39% of adults described their situation as healthy, up from 27% in September 2022, the low point of the energy crisis.
At the other end of the scale, the share who are struggling or in trouble has fallen from 28% to 12% over the same period. PwC says finances have improved across every age and socio-economic group, including the least affluent DE group. That breadth matters for the high street more than any single number: a recovery concentrated among affluent AB households tends to show up in premium and luxury spend, while a recovery that reaches C2 and DE households shows up in convenience stores, value chains and local independents.
The improvement also shows in short-term intentions. The proportion of adults planning to cut spending over the next three months fell to 68% in August from 78% in April, and is now lower than in either January or April. That is still more than two thirds of the population planning some form of cutback, which is why PwC keeps using the word “caution” alongside “cheer”.
Real income growth is doing the work
PwC attributes the repair in finances to a period of real income growth: pay rising ahead of prices. In the firm’s Autumn 2025 edition, published last October, it had pointed out that real earnings were already 5% higher than at the start of 2020 but that UK households were unusually slow to spend, with the savings ratio sitting well above its 2017 to 2019 average, the largest such gap in the G7. The August data suggests that at least some of that reluctance is fading, though PwC is careful not to describe the shift as a spending boom.
Is Christmas 2026 really starting in August?
Yes, for a meaningful minority. PwC found that 14% of consumers had already started their Christmas shopping by mid-August, when the fieldwork was carried out, and a further 16% plan to do most of their shopping earlier than they did last year. Only 4% plan to shop later than usual. The firm links the early start to the summer’s events: the World Cup and the heatwave, in the words of Sam Waller, PwC UK’s leader of industry for consumer markets, “helped spur a welcome uplift in consumer sentiment”.
The spending balance has flipped, too. A quarter of consumers (25%) expect to spend more on Christmas shopping and celebrations this year, compared with 22% in the previous edition, while 21% expect to spend less, down from 26%. PwC says this is the first Christmas since the pandemic in which the balance has shifted towards spending more, and the most optimistic reading since the end of the pandemic. Among those who are cutting back, 73% cite the rising cost of living, according to Drapers’ account of the survey.
The comparison with last year is stark. In PwC’s Autumn 2025 pulse, 28% expected to spend less on Christmas against 21% expecting to spend more, a net balance of -7, and only 21% had started shopping by the end of September compared with 25% a year earlier. This year the net balance is +4 and a larger share had started by mid-August than had started by late September in 2025.
| PwC Christmas spending intentions | Autumn 2024 | Autumn 2025 | Autumn 2026 |
|---|---|---|---|
| Expect to spend more on Christmas | n/a | 21% | 25% |
| Expect to spend less on Christmas | n/a | 28% | 21% |
| Net balance (more minus less) | -12 | -7 | +4 |
| Already started Christmas shopping at survey time | 25% (late Sept) | 21% (late Sept) | 14% (mid-Aug) |
| Plan to shop earlier than last year | n/a | n/a | 16% |
| Headline sentiment index | n/a | -5 | +1 |
Source: PwC Consumer Sentiment Survey editions as reported by PwC UK, InsightDIY and Drapers. The 2026 “already started” figure was collected roughly six weeks earlier in the year than the 2024 and 2025 figures, so it is not directly comparable.
John Lewis and Harrods have already opened their Christmas shops
PwC points to the department stores as the pace-setters. Harrods and John Lewis have already opened their Christmas shops online or in-store, and PwC expects others to follow shortly. John Lewis said its early online launch came as “festive fever hits record highs”, with customer searches for “Christmas” jumping 33% week-on-week immediately after the World Cup final on 19 July, according to the PwC report. That is the same partnership that, as we reported last week, has cut its Christmas seasonal hiring to 10,400 roles, down roughly a quarter on 2025, which tells you the early launch is about capturing demand efficiently rather than adding capacity.
Why does PwC think the good mood will not last?
The survey’s title on PwC’s own site is “Consumer cheer expected to fade fast”, and the firm gives four reasons: it expects food and fuel inflation to rise in the autumn, and there is uncertainty about what the new Chancellor will announce in the Budget on 28 October. Third, PwC’s economists note that while the Prime Minister may have changed, “the fiscal arithmetic has not”, leaving little room for giveaways and a real possibility of tax rises. Fourth, some demographics are already showing financial stress even as the national picture improves.
Jacqueline Windsor, UK head of retail at PwC, put it this way in the firm’s release: “For retailers, Christmas needs to come early. Consumer sentiment has hit positive territory for the first time since the pandemic, and some people have already started festive shopping. It’s a golden period of consumer confidence that may have come too early for the Golden Quarter. We expect food and fuel inflation to bite in the Autumn, and added uncertainty as the new Chancellor assesses if any tax changes may be needed in the upcoming Budget. Retailers would do well to strike early with Christmas before purse strings tighten.”
The food inflation warning is consistent with other recent forecasts. The Food and Drink Federation, as we covered on Saturday, expects food inflation of around 3.9% by Christmas 2026 with a peak of 6.4% in July 2027, citing higher gas, diesel, wheat and cocoa costs. If that trajectory holds, the fall in inflation expectations that lifted PwC’s index in August would be reversing by the time most Christmas shopping is done.
Timing is the whole argument
PwC’s central point is about sequencing. Past surveys show that, whatever people say in August, the bulk of Christmas shopping is done in the final few weeks before 25 December. By then, PwC argues, expected rises in food and fuel prices will have fed through to the consumer and any tax rises mooted in the Budget will be front of mind. The firm’s advice is therefore to pull demand forward: “you’ll be knocking at a door that’s open, for now.”
Which shoppers are still under pressure?
The national improvement hides a generational split. Concern about job prospects among 18 to 24-year-olds rose to 61% in August from 54% in January. Among 25 to 34-year-olds, concern about job security or prospects rose from 59% to 63%, and worry about mortgage repayments or rent increases jumped from 52% to 62% over the same period. These are the cohorts that PwC elsewhere identifies as the most willing to spend on fashion, beauty and technology, which makes the rise in their anxiety a direct risk to discretionary categories.
The broad worry list is otherwise unchanged. Some 85% of consumers remain concerned about the rising cost of everyday things and 86% about the UK economy, according to KamCity’s summary of the findings. The only issue that has become a bigger concern since January is the environment and global warming, which rose to 75% from 71%, a shift PwC attributes to the summer heatwaves.
| Concern (next 12 months) | January 2026 | August 2026 | Change |
|---|---|---|---|
| 18 to 24-year-olds worried about job prospects | 54% | 61% | +7 pts |
| 25 to 34-year-olds worried about job security | 59% | 63% | +4 pts |
| 25 to 34-year-olds worried about mortgage or rent | 52% | 62% | +10 pts |
| All adults: rising cost of everyday things | c. 85% | 85% | flat |
| All adults: UK economy | c. 86% | 86% | flat |
| All adults: environment and global warming | 71% | 75% | +4 pts |
Source: PwC Consumer Sentiment Survey, Autumn 2026, as published by PwC UK and reported by KamCity and Drapers.
What each age group says it will spend on
PwC’s “taking action” section breaks down where the spare cash is likely to go. Under-35s have positive spending intentions across most categories, with fashion and beauty a particular priority; for every other age group, fashion registers negative intentions. The 25 to 34 bracket leads all other groups on beauty and personal care. The 35 to 54 group, described by PwC as “particularly buoyant at the moment”, is most likely to spend on groceries, pets, children and health and wellbeing, with the 45 to 54 tranche more inclined to book holidays.
Over-55s prioritise grocery shopping like everyone else, but PwC says they are less willing to trade down, stick to preferred brands and are more likely to buy premium goods than to chase discounts. Together with 18 to 24-year-olds, they rank holidays among their top priorities, but with more money to spend and less willingness to compromise on quality. For an independent food shop, deli or specialist retailer, that is the customer segment most worth defending through the autumn.
How does PwC’s reading compare with other UK confidence gauges?
PwC is not the only barometer, and the others are less cheerful. GfK’s long-running consumer confidence index stood at -14 in August, as we noted in our preview of the ONS retail sales release due on 18 September. The BRC-KPMG Retail Sales Monitor put August sales growth at just 0.7%, with food up 2.6% and non-food down 0.8%, and Barclays card data showed consumer spending up 2.1% with retail up 1.2%. None of that reads like a five-year high.
The difference is largely one of construction. PwC’s index measures expectations about personal disposable income over the next year, which responds quickly to real wage growth and falling inflation expectations. GfK blends personal finances with views on the general economic situation and the climate for major purchases, and the economic component tends to lag. The two surveys are also asked at different times: PwC’s fieldwork was in the second week of August, at the peak of the heatwave and with the World Cup afterglow still fresh, while the BRC and Barclays figures cover actual spending across the whole month.
| Gauge | Latest reading | What it measures | Read-across for shops |
|---|---|---|---|
| PwC Consumer Sentiment Index | +1 (Aug 2026), from -13 in April | Expected household disposable income, next 12 months | Mood is up; intentions improving in every category since April |
| GfK Consumer Confidence | -14 (Aug 2026) | Personal finances, economy and major-purchase climate | Still negative; economic pessimism drags on the composite |
| BRC-KPMG Retail Sales Monitor | +0.7% (Aug 2026 total sales) | Actual retail sales value, members’ stores and online | Food carrying growth; non-food slightly down |
| Barclays consumer card spending | +2.1% overall, +1.2% retail (Aug 2026) | Card transactions | Spend growing below inflation in retail |
| ONS retail sales (Great Britain) | Due 18 September for August | Volumes and values, official statistics | The hard test of whether confidence converted into sales |
Sources: PwC UK, GfK, BRC-KPMG, Barclays and ONS release calendar, as previously reported.
Mood versus money
The honest reading is that consumers feel better than they are spending. Real wage growth has repaired balance sheets, but a 68% majority still plans to cut back somewhere and grocery remains the one category where net spending intentions are reliably positive, a pattern PwC first flagged last October when it noted that the grocery figure was “driven by inflation expectations”. For shops, that argues for treating the August optimism as a window rather than a trend.
What does this mean for independent shops and the high street?
The survey lands in a crowded fortnight for UK retail policy. Independent-retail trade bodies have already lodged their Budget submissions: as we reported this morning, Bira has pressed the Chancellor on business rates ahead of 28 October, asking for the restoration of higher retail, hospitality and leisure relief. The Federation of Independent Retailers issued a similar call on Monday, according to Talking Retail and Retail Insight Network. PwC’s message to those same shops is that the consumer side of the equation is, for the moment, more favourable than the cost side.
There is a practical reason PwC’s timing advice matters more to a small shop than to a national chain. A department store can open a Christmas shop in August and hold stock for four months. An independent gift shop, toy shop or deli usually cannot, which means the decision to bring forward festive ranges is also a decision about cash flow and storage. The survey suggests that the risk of bringing Christmas forward is lower this year than last, because a larger share of customers say they are ready to buy, and the risk of waiting is higher, because the mood is expected to sour.
The other pressure is the one PwC lists last: costs. The firm notes that the business rates revaluation, new employment rights and geopolitical friction have already raised costs for some UK businesses in 2026, and that uncertainty is likely to remain in the short to medium term. A recent Enterprise Nation and Square survey found that three in ten high street small businesses had considered closing in the past year, with VAT and wages the top pressures. A five-year high in customer confidence does not change the rates bill, but it does change what a shop can reasonably expect to take through the till while it waits for the Budget.
PwC’s four actions, translated for a small shop
- Start Christmas early. Launch gift ranges, gift cards and pre-order lists now rather than in November. PwC’s framing is that the door is open “for now”.
- Target the groups still spending. Under-35s on fashion and beauty; 35 to 54-year-olds on groceries, pets, children and wellbeing; over-55s on premium food and brands they already trust.
- Get costs in order. PwC’s larger clients are using AI for pricing and promotion decisions; the small-shop equivalent is tightening stock, pruning slow lines and locking in energy contracts before the autumn.
- Brace for the Budget. Assume little fiscal room and possible tax rises, and plan promotions for November and December on the basis that sentiment will be weaker than it is today.
What is the timetable from here?
The next month contains several tests of whether the August mood survives. ONS inflation figures for August are due on 16 September, the Bank of England’s rate decision follows on 17 September with Bank Rate currently at 3.75%, and Next reports half-year results the same day. ONS retail sales for August land on 18 September. The Employment Rights Act’s first tranche of changes for shops takes effect on 1 October, and the Budget is on 28 October.
PwC’s next reading of the index would normally arrive in the run-up to Christmas. By then the firm expects the August highs to have faded, which is why it has chosen to publish the autumn edition with a warning attached rather than a celebration. The Grocer’s summary that “shopper optimism rebounds to hit five-year high” and PwC’s own headline that the cheer is “expected to fade fast” are two halves of the same finding.
What to watch in the data
- Food inflation: if the BRC-NIQ shop price index and the ONS food component turn up in September and October as the FDF expects, PwC’s index is likely to follow them down.
- Youth employment worries: the rise in job and rent concern among under-35s is the clearest crack in the survey; watch labour market data and rental inflation.
- Christmas launch dates: PwC expects more chains to follow John Lewis and Harrods within weeks; the earlier the majors go, the sooner independents face a comparison.
- Budget signals: any pre-briefing on VAT, business rates relief or employer costs in October will land directly on the “uncertainty” PwC identifies.
Frequently asked questions
What is the PwC Consumer Sentiment Index?
It is a quarterly UK survey run by PwC since 2008 that asks adults whether they expect their household to be better or worse off over the next 12 months. The index is the net balance of optimists over pessimists. The Autumn 2026 edition surveyed 2,070 UK adults in the second week of August 2026.
What did the index read in August 2026?
+1, up from -13 in April 2026 and two points above January. It is the first positive reading since September 2021 and the highest in five years. The long-run average of the series is around -15.
Why did consumer confidence improve?
PwC attributes it to real income growth: ONS data shows average earnings have risen faster than overall inflation and faster than food inflation since January, while inflation expectations have fallen since April. The World Cup and the summer heatwave also lifted the mood, according to PwC’s Sam Waller.
How many people have already started Christmas shopping?
14% of consumers said they had started by mid-August 2026, and a further 16% plan to do most of their shopping earlier than last year. Only 4% plan to shop later than usual. 25% expect to spend more on Christmas this year and 21% expect to spend less.
Why is PwC telling retailers to start Christmas early?
Because it expects the current optimism to fade. PwC anticipates food and fuel inflation rising in the autumn and uncertainty around possible tax changes in the 28 October Budget. Its head of retail, Jacqueline Windsor, said retailers “would do well to strike early with Christmas before purse strings tighten”.
Which groups are most confident?
35 to 44-year-olds recorded a score of +21, the highest for any age group since the survey began in 2008. PwC says older families, pensioners and less affluent households saw the biggest improvement in their finances, and every age and socio-economic group improved.
Which groups are under the most pressure?
Younger adults. Concern about job prospects among 18 to 24-year-olds rose to 61% from 54% in January, and among 25 to 34-year-olds worry about mortgage or rent rose to 62% from 52%. Across all adults, 85% remain concerned about the rising cost of everyday things.
How does this compare with GfK consumer confidence?
GfK’s index was -14 in August 2026, still firmly negative. The two measure different things: PwC focuses on expected household disposable income, while GfK blends personal finances with views on the wider economy and the climate for major purchases, which remain gloomy.
What should an independent shop do with this information?
PwC’s advice is to bring festive ranges, gift cards and pre-orders forward, target the age groups still spending in your category, tighten stock and costs now, and plan November and December promotions on the assumption that sentiment will be weaker after the Budget than it is today.
The full survey and PwC’s sector recommendations are available on PwC UK’s Consumer Sentiment Survey page.