Source: Sharecast
The GfK consumer confidence index rose by two points to -17 this month, its highest level this year, with four of the five components of the gauge improving from July.
Notably, sentiment gauges around consumers' personal financial situation over the past 12 months and expectations for the coming year both rose by three points to -4 and +5, respectively.
GfK said the brighter outlook was most likely due to the Bank of England cutting interest rates to a two-year low earlier this month.
However, Neil Bellamy, consumer insights director at GfK, said there were still "many clouds on the horizon in the form of inflation – the highest since January 2024 – and rising unemployment. There’s no shortage of speculation, too, about what the autumn Budget will bring in terms of tax rises."
Bellamy added: "While August’s Overall Index Score of -17 is the best this year, consumer confidence continues to move in a very narrow band, and there’s no sense that it is about to break out into fresher, more optimistic territory. The UK’s consumers are still in wait-and-see mode, and any surprises could result in sudden and sharp changes in sentiment.”
