UK consumer confidence bounces, but remains strongly negative

Consumer confidence among Britons rebounded in August, according to fresh survey data on Friday, although the index remained in the negatives.

GfK’s UK consumer confidence index jumped five points month-on-month, settling at -25, rebounding from a dip to -30 in July.

The personal finance index, which gauges changes over the last year, rose by five points, standing at -15.

Compared to August last year, it was an improvement of 10 points.

Looking at expectations for personal financial conditions in the coming 12 months, there was a notable four-point rise to -3, a significant 28-point leap from the same period last year.

The economic situation index for the last 12 months also saw improvement, rising by six points to -52, making for a 16-point improvement from August 2022.

Future expectations about the country's economic state in the coming year also saw a three-point enhancement, reaching -30, making for a noteworthy 30-point jump compared to last year.

The major purchase index, indicating consumers' willingness to make significant purchases, escalated by eight points, printing at -24.

That was a 14-point rise when compared to the statistics from August 2022.

Finally, the savings index saw a modest ascent of one point, culminating at +27, which was nine points higher than the same period in a year earlier.

“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,” said GfK client strategy director Joe Staton.

“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.”

Staton said the renewed optimism could also be seen in the similar turnaround for its view on the general economic outlook for the next 12 months, adding that the eight-point advance in major purchase intentions was potentially better news for retailers as autumn approached.

“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.”

Reporting by Josh White for Sharecast.com.