Consumer confidence hits two-year high

Consumer confidence unexpectedly hit a more than two-year high in September, as households grew more optimistic about their personal finances, according to the GfK’s consumer confidence barometer.

Confidence in the UK has improved for the third consecutive month, reaching minus 13 in September, up one point from last month and marking its highest level since August 2024.

Consumers also became less willing to make major purchases and increased their savings intentions. Concern about future energy bills appears to be weighing on confidence, with household energy costs potentially rising further when the price cap resets in January.

Neil Bellamy, Consumer Insights Director at GfK, an NIQ Company, said “September continued the gradual recovery seen since April, with consumer confidence rising one point to -13. This marks the first time since summer 2024 that we have seen three consecutive monthly increases in the Overall Index Score.

“The largest gains this month came from perceptions of the wider economy over the past year (up four points) and personal finances over the same period (up three points). The forward-looking economic and financial measures both rose modestly, each up one point. The only measure to fall this month was the Major Purchase Index, down one point, which comes as we head into the important Golden Quarter for retailers.

“The Savings Index rose five points, which, although not used in our headline score, may indicate that those who can are thinking of building a financial buffer. However, the return of higher inflation removes one of the strongest positives seen in previous months. So, while the headline score continues to improve, confidence is still firmly in negative territory. With inflation, energy and fuel prices rising, could we soon see consumer sentiment falter?”