British Consumer Confidence Reaches Highest Level Since 2022
British consumers are feeling increasingly optimistic about the economy, according to a survey conducted by GfK. The survey, which measures consumer sentiment, revealed that optimism among UK consumers has reached its highest level since January 2022, as inflation eases and wages continue to grow.
The GfK consumer sentiment indicator rose for the second consecutive month to -21 in September, up from -25 in August. However, it remains below the survey’s average of -10, which has been recorded since 1974. Economists had expected a fall to -27, making the actual result better than anticipated.
Joe Staton, GfK’s client strategy director, highlighted that despite the positive headline figure, many households are still grappling with the cost-of-living crisis, and economic conditions remain challenging. Staton stated, “The reality is that consumer confidence remains suppressed, and the financial mood of the nation is still negative.”
The survey results showed that households’ expectations for their personal financial situation over the next year improved slightly, with a decrease from -3 to -2. A year ago, this figure stood at -40 due to soaring energy prices. Meanwhile, views on the economy for the next 12 months improved more significantly, with a decrease from -30 to -24.
Inflation, which has been a key concern for consumers, dropped to 6.7% in August. Although it remains more than three times the Bank of England’s target, it is a significant decrease from the 41-year high of 11.1% reached in October 2022.
The Bank of England recently decided to pause its long series of interest rate hikes, holding the Bank Rate at 5.25% following 14 consecutive increases. This decision is a response to the country’s slowing economy.
The GfK survey was conducted between September 1 and September 13, with a sample size of 2,001 people. While the overall trend indicates growing consumer optimism, it is important to acknowledge that the UK’s cost-of-living crisis and challenging economic conditions continue to impact households.
More detail via Investing.com UK here… ( Image via Investing.com UK )