UK consumer confidence improving

The market analyst’s latest monthly barometer shows UK consumer confidence grew by five points in August to reach an overall figure of -25.

Joe Staton, client strategy director at GfK, said: “Against a backdrop of falling core inflation, higher interest rates and rising average weekly earnings, the Consumer Confidence Index has regained momentum this month with a welcome five-point improvement.

“Although the headline figure remains strongly negative at -25, hopes for our personal financial situation for the coming year are heading back towards positive territory, a metric that is key to indicating the future financial position of households.

“This renewed optimism can also be seen in the similar turnaround for our view on the general economic outlook for the next 12 months, and the eight-point advance in major purchase intentions is potentially better news for retailers as we move into autumn.

“However, while the financial pulse of the nation is still weak, these signs of optimism are welcome during this challenging time for consumers across the UK.”

Linda Ellett, UK head of consumer markets, retail and leisure at business advisor KPMG, said: “Consumer price inflation is slowing, but costs remain elevated and will continue to test many household budgets for months to come.

“This prolonged pressure has already led nearly 40% of consumers that KPMG surveyed to buy more value produce this year, with the same amount buying more promotional items.

“Plus, a third of consumers reported they are shopping at lower-cost retailers or buying lower-cost branded goods.

“These actions have helped some households manage their budgets and will continue to do so, but other consumers still face far more significant price hikes in the likes of mortgage or rent, which are far harder to manage and will inevitably impact consumer spending further.”