British Consumer Confidence Hits Highest Point Since Early 2022: GfK

22 Sep, 2023

British Consumer Confidence Hits Highest Point Since Early 2022: GfK

UK consumers are feeling increasingly optimistic about the economy, buoyed by a decline in inflation and rising wages, according to a recent survey conducted by GfK. In September, the GfK consumer sentiment indicator climbed to -21, marking the highest level since January of the previous year. However, it's worth noting that this figure remains below the long-term survey average of -10, which has been tracked since 1974. Economists, who were surveyed by Reuters, had predicted a decline to -27, indicating a more positive outlook among consumers than expected.

Joe Staton, GfK's client strategy director, emphasized that while the improved headline score is a positive development, many households continue to grapple with the challenges of the ongoing cost-of-living crisis, and economic conditions remain demanding. In essence, consumer confidence remains somewhat constrained, and the overall financial sentiment in the country remains pessimistic.

The survey revealed that households' expectations for their personal financial situations over the next year saw a slight improvement, moving from -3 to -2. This is a notable shift from a year ago when the reading plummeted to -40, primarily due to surging energy prices. Additionally, the gauge measuring views on the economy over the next 12 months showed a more substantial improvement, moving from -30 to -24.

Consumer price inflation, while down to 6.7 percent in August from its peak of 11.1 percent in October 2022, still remains well above the Bank of England's target. In response to a slowing economy, the Bank of England recently decided to pause its series of consecutive interest rate hikes, maintaining the Bank Rate at 5.25 percent following 14 consecutive increases.

The GfK survey data was collected from 2,001 respondents during the period of September 1 to September 13, providing valuable insights into the evolving sentiment of UK consumers regarding their financial outlook and the broader economy.