NEWS25 August 2023

UK consumer confidence regains ‘momentum’ in August but financial pulse ‘still weak’

Cost of Living News Trends UK

UK – Consumer confidence in the UK has “regained momentum” in August, with key indicators of the nation’s health showing an uptick in fortunes, following a big drop last month, according to the GfK Consumer Confidence Index.

Shopping bags mystery shopping_crop

The Consumer Confidence score was up five points between July and August, however, it remains in negative territory at -25 overall. The uptick is a welcome contrast to the six points it was down in July.

All key measures were up on the year but German market research firm GfK said the “financial pulse of the nation is still weak”.

Personal Financial Situation -The index measuring changes in personal finances during the last year is up five points at -15; this is 10 points better than August 2022.  

The forecast for personal finances over the next 12 months increased four points to -3, which is 28 points higher than this time last year. 

General Economic Situation- The measure for the general economic situation of the country during the last 12 months is up six points at -52; this is 16 points higher than in August 2022.   

Expectations for the general economic situation over the next 12 months have increased by three points to -30; this is 30 points better than August 2022.

Major Purchase Index- The Major Purchase Index is up eight points to -24; this is 14 points higher than this month last year. 

Savings Index-The Savings Index is up one point to +27; this is nine points higher than this time last year.

The survey was conducted among a sample of 2,001 individuals aged over 16.

Joe Staton, client strategy director GfK, says: “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.”