Consumer confidence reaches highest level since January 2022
GfK’s Consumer Confidence Index reached its highest level in nearly two years in September, the second consecutive month of increasing scores following August’s bounce-back.
The overall index score increased by four points to -25, the highest since January 2022, with all measures improving compared to August. This was 28 points ahead of September last year, which recorded a score of -49.
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 two points to -13, while the score for personal financial situation for the next 12 months increased one point to -2.
The score for consumer opinions on the general economic situation over the last 12 months improved by five points points to -47, whilst the index measuring sentiments about the next 12 months rose six points to -24.
The major purchase index, which measures consumer likelihood to make larger, discretionary purchases, also increased, climbing four points to -20.
The savings index, which does not contribute to the overall score, was unchanged, at 27. This may be seen as a reflection of high interest rates putting people off saving and encouraging saving.
Joe Staton, client strategy director at GfK, said: “Against the backdrop of falling inflation figures, growth in wages and high interest rates, UK consumer confidence rose this month to -21, the best recorded showing since January 2022.
“The view on our personal financial situation for the past year and the next is registering marginal but welcome growth, while expectations for the UK’s wider economy in the coming year show a more robust six-point increase. And with less than 100 shopping days to Christmas, the four-point boost to the major purchase measure might offer some hope to retailers, who know all too well that many people face financial pressure in the run-up to this year’s festive season.
“While this month’s improved headline score is good news, it’s important to note many households are still struggling with the cost-of-living crisis and that economic conditions are tough. The reality is that consumer confidence remains suppressed, and the financial mood of the nation is still negative.”