“Signs of optimism” as consumer confidence bounces back in August
GfK’s Consumer Confidence Index bounced back in August, after a downturn in July ended a run of six consecutive months of increasing scores.
The overall index score increased by five points to -25, with all measures increasing against July. This was 19 points ahead of August last year, which recorded a score of -44.
The long-standing index is measured in five categories and aims to provide context on the general consumer sentiment regarding the economy.
The index score for opinions on personal financial situation over the last 12 months rose by five points to -25, while the score for personal financial situation for the next 12 months increased four points to -3.
The score for consumer opinions on the general economic situation over the last 12 months improved by six points to -52, whilst the index measuring feelings about the next 12 months rose three points to -30.
The major purchase index, which measures consumer likelihood to make larger, discretionary purchases, also increased, recording a jump of eight points to -24.
The savings index, which does not contribute to the overall score, was up by one point for the second time in as many months to 27. This may be seen as a reflection of high interest rates putting people off saving and encouraging saving.
Joe Staton, client strategy director of 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.”