UK consumer confidence holds steady, but personal finance expectations

22nd Aug 2024 08:07

(Sharecast News) - Consumer confidence in the UK remained stable in August, according to a closely watched GfK survey, as improving sentiment towards personal finances was offset by the first fall in economic expectations in six months.

The GfK Consumer Confidence Barometer came in at -13 this month, in line with the July reading and up from -25 in August of last year.

Three of the five sub-indices of the survey measuring people's personal finances improved in August while two measuring sentiment towards the economic environment worsened.

Notably, the sub-index measuring sentiment towards people's personal financial situation over the next 12 months jumped by three points to +6, which GfK client strategy director Joe Staton said could be due to the recent Bank of England interest-rate cut, "and hopes of more to come".

Meanwhile, the major purchase index, which tracks the public's confidence in making major purchases such as furniture or electrical goods, improved to -13 from -16. "The three-point jump in the Major Purchase Index is great news for retailers with more shoppers agreeing that now is a good time to buy big-ticket items," Staton said.

However, two sub-indices measuring consumers' views on the economic situation both declined further into negative territory, with economic sentiment for the coming year falling four points to -15 - the first drop since February.

Nevertheless, Staton said that all the key numbers this month are "significantly more encouraging" than 12 and 24 months ago. "But as we move into autumn and winter, how much further will this slow improvement in the mood of the nation run?"