According to the latest data from GfK, UK consumer confidence showed signs of improvement in September, marking the third consecutive month of growth. The Consumer Confidence Index, a long-standing measure of consumer sentiment, increased by four points to -21 this month. Additionally, four out of the five supporting measures also displayed improvement compared to August. While these figures are positive, GfK cautioned that consumer confidence still remains low and the overall financial mood of the nation remains negative.
It is worth noting that these improved figures come at a time when inflation rates are declining, wages are increasing, and interest rates are high. In fact, GfK states that this is the best showing of consumer confidence since January 2022.
One of the supporting measures that saw improvement was the consumer view on personal financial situations. It experienced a small but significant growth, with figures for the past year increasing by two points to -13, and a noteworthy 15 points higher compared to the same period last year. Looking ahead to the next 12 months, this measure increased by one point to -2, which is a significant rise of 38 points from September 2022.
The measure for the general economic situation of the country over the past 12 months also saw a positive trend, rising by five points to -47. This marks a 25-point increase from September 2022. Expectations for the general economic situation in the next 12 months also improved, increasing by six points to -30, which is a significant 44-point rise from the previous year, although it still remains negative.
Moreover, the Major Purchase Index, which measures consumer sentiment towards making significant purchases, also experienced growth. It increased by four points to -20, which is 18 points higher than the same month last year. The Savings Index remained unchanged at +27, but it is still 16 points higher than this time last year.
Joe Staton, Client Strategy Director at GfK, emphasized the positive impact of the four-point boost in the major purchase measure for retailers as the Christmas season approaches. However, he also highlighted that many households are still facing challenges due to the cost-of-living crisis and tough economic conditions.
As we approach the holiday season, this increase in consumer confidence could provide some hope for retailers. However, it is important to acknowledge that many households are still grappling with financial pressures and difficult economic circumstances.
While the overall outlook for UK consumer confidence shows signs of improvement, there is still work to be done in addressing underlying issues and ensuring sustainable economic growth.
For more information on UK consumer confidence and its impact on the economy, you can visit the following links:
1. Bank of England – Consumer Confidence Measures
2. Office for National Statistics – Consumer Price Indices
