UK consumer confidence increases as inflation slows but customers remain under pressure

The overall index score for consumer confidence saw a four-point increase to -21 in September, according to the latest GfK Consumer Confidence Index.

All five indexes measuring consumer confidence were up compared with last month “against a backdrop of falling inflation figures, growth in wages and higher interest rates”.

The index measuring consumers’ confidence in their personal financial situation over the past 12 months inched up two points to -13. Looking ahead to the next 12 months, it increased one point to -2.

Consumer confidence in the general economic situation over the past 12 months increased five points to -47 and jumped six points to -24 when looking at the next 12 months.

The major purchase index also saw a four-point increase to -20, while the savings index remained flat at 27 – 16 points higher than this time last year. 

Joe Staton, client strategy director at GfK, said: “Against the backdrop of falling inflation figures, growth in wages and high interest rates, UK consumer confidence rose this month to -21, the best recorded showing since January 2022.

“The view on our personal financial situation for the past year and the next is registering marginal but welcome growth, while expectations for the UK’s wider economy in the coming year show a more robust six-point increase.

“And with less than 100 shopping days to Christmas, the four-point boost to the major purchase measure might offer some hope to retailers, who know all too well that many people face financial pressure in the run-up to this year’s festive season.

“While this month’s improved headline score is good news, it’s important to note many households are still struggling with the cost-of-living crisis and that economic conditions are tough. The reality is that consumer confidence remains suppressed and the financial mood of the nation is still negative.”