British consumer confidence remained at nearly a three-year high in August, buoyed by improved sentiment around personal finances and major purchases, according to a survey that adds to the positive momentum in the broader economy.
The GfK Consumer Confidence Index, the UK’s longest-running measure of public economic sentiment, held steady in August at -13, matching July’s 34-month high. Economists polled by Reuters had expected a slightly more optimistic reading of -12.
This survey follows a wave of encouraging data from companies since Prime Minister Keir Starmer’s Labour Party secured a landslide election victory last month. Business surveys suggest that the economy is on track for robust growth in the second half of 2024.
Notably, the survey’s measure of enthusiasm for major purchases reached its highest level since January 2022, while optimism about personal finances also saw an uptick.
“This more positive outlook could be attributed to the mortgage-friendly interest rate cut at the start of August, along with hopes for further reductions,” said Joe Staton, client strategy director at GfK.
Earlier this month, the Bank of England reduced borrowing costs from a 16-year high of 5.25 per cent. However, Governor Andrew Bailey and other top officials have indicated that further rate cuts may not be imminent.
Despite these gains, the GfK report noted a cooling in both past and future economic sentiment.
The survey, conducted between 1st and 15th August, included responses from 2,003 participants.