UK consumer confidence regains momentum with five-point increase in August

The overall index score for consumer confidence saw a welcome five-point increase to -25 in August, 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 core inflation, higher interest rates and rising average weekly earnings”.

The index measuring consumer confidence in their personal financial situation over the past 12 months inched up five points to -15. Looking ahead to the next 12 months, it increased four points to -3.

Consumer confidence in the general economic situation over the past 12 months increased six points to -52 and jumped three points to -30 when looking at the next 12 months.

The major purchase index also saw an eight-point increase to -24, while the savings index increased one point to 27 – nine points higher than this time last year.

Joe Staton, client strategy director at 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.

“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.”