Consumer confidence increased in August

25th August 2023

GfK’s Consumer Confidence Index improved five points in August, although it remains in negative territory at minus 25. Confidence in the general economic situation for the next 12 months increased by three points to minus 30. The major purchase index rose eight points to minus 24, while the personal finance 12-month forward index rose four points to minus three.

The figures suggest consumer demand has been resilient to the shocks of rising prices and more expensive borrowing.

The long-running consumer confidence index had dropped in July at the same time as retail sales fell due to some of the heaviest rainfall ever recorded in July. It was the first fall since January.

Prior to the fall last month, consumer confidence in June had been at its strongest in 17 months and had grown for five months in a row.

Joe Staton, Client Strategy Director 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.”