UK consumer confidence improves in August as inflation falls

GfK’s Consumer Confidence Index was up five points to -25 in August, compared with -44 in August 2022.

UK consumers’ expectations for the general economic situation over the next 12 months have increased by three points to -30, which is 30 points higher than the same period last year.

The forecast for personal finances over the next 12 months increased four points to -3, which is 28 points higher than August 2022.

Joe Staton, client strategy director 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.”

Staton continued: “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.”