By Ed Frankl

Consumer confidence in the U.K. picked up this month as the outlook for trade improved and data showed the economy grew more than expected at the start of the year, according to a monthly survey published Thursday.

Consumer expectations of the state of the economy over the next three months, as measured by the British Retail Consortium and Opinium, rose to minus 36 in May from minus 48 last month, the BRC Consumer Sentiment Monitor said.

"Consumer confidence improved as U.K. economic growth picked up and geopolitical tensions eased as the U.S.-China trade war began to cool," Helen Dickinson, chief executive of the British Retail Consortium, said.

However, the index remains far below the level of last year. Around 51% of respondents believe the economy will worsen, while just 15% expect it to improve.

In the last month, the U.K. has made trade agreements with the U.S., India and the European Union. Britain agreed to an outline of a trade deal with the U.S. that lowered the Trump administration's tariffs on steel, aluminum and most car imports into the U.S., though it kept a 10% baseline tariff on most other goods.

"Only weeks ago, consumers were facing uncertainty arising from President Trump's announcement of eye-watering tariffs on many countries. Fast forward to today, the U.K. has trade deals with some of the world's largest economies," Dickinson added.

The survey of 2,000 consumers was conducted between May 6 and May 9, before the announcement of the agreement with the EU that eases some of the trade barriers erected after Brexit and boosts security co-operation. That latest deal will hopefully drive further confidence in the outlook for the economy and personal finances, Dickinson added.

Official data from the Office for National Statistics also showed U.K. growth domestic product rose 0.7% in the first quarter, better than had been expected.

Respondents over the age of 60 saw the biggest improvement in May compared with April, likely reflecting the recovery in the stock market after the turbulence caused by the flurry of U.S. tariff announcements, Dickinson noted.

The BRC survey comes ahead of GfK's consumer-confidence gauge due to be published Friday.

Write to Ed Frankl at edward.frankl@wsj.com

(END) Dow Jones Newswires

May 21, 2025 19:01 ET (23:01 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.