UK consumer confidence perks up to best level in two years - GfK

UK consumer confidence rose in August, spiking to the best level since 2024, a long-running tracker showed Friday.

GfK's consumer confidence index improved to negative 14 points in August from negative 17 in July.

On-year, it was also up by three points. In addition, it was the best reading for two years, GfK said.

"Does all this mean that people have greater faith in the new government to increase growth and job opportunities? Can consumers finally see an end to the cost-of-living crisis? It would be tempting to say yes, but frankly it's too soon to tell," Neil Bellamy, a consumer insights analyst at GfK said.

Bellamy noted UK consumer price inflation accelerated last month. The Office for National Statistics said on Wednesday that the consumer prices index rose 2.9% in the 12 months to July, picking up from 2.6% in June.

Bellamy added: "With inflation back on the rise – now at 2.9% and the highest in four months – and with continued uncertainty in the Middle East and elsewhere, there are still many challenges ahead that will test the mettle of UK consumers."

Consumer morale improved largely across the board, according to GfK. The assessment on the personal financial situation over the past 12 months rose to negative 6 points in August from July's negative 8. The more forward-looking personal assessment for the next 12 months rose to 4 points from 1 point a month prior.

The major purchase index rose to negative 7 points from negative 12, while the assessment of economic prospects over the next 12 months rose to minus 23 points in August from minus 28 in July.

However, the general economic situation gauge for the last 12 months worsened slightly to negative 40 from negative 39.

The survey was conducted on 2,000 individuals aged over 16 in the UK. Interviewing took place between July 30 and August 12.

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