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onsumer confidence is exhibiting “renewed optimism” in opposition to a backdrop of falling core inflation, figures counsel.
GfK’s long-running Consumer Confidence Index improved 5 factors in August, with all measures reversing the drop seen in July, though it stays firmly in destructive territory at minus 25.
Confidence within the basic financial state of affairs for the subsequent 12 months elevated by three factors to minus 30 – 30 factors higher than final August – in opposition to a backdrop of falling core inflation, greater rates of interest and rising common weekly earnings, GfK stated.
The forecast for private funds over the approaching 12 months elevated 4 factors to minus three – 28 factors greater than this time final 12 months.
Meanwhile, the most important buy index – a measure of confidence in shopping for big-ticket gadgets rose eight factors to minus 24, 14 factors greater than this month final 12 months.
Joe Staton, consumer technique director at GfK, stated: “Although the headline figure remains strongly negative at minus 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.”
Linda Ellett, UK head of retail and leisure shopper markets for KPMG, stated: “Consumer price inflation is slowing, but costs remain elevated and will continue to test many household budgets for months to come.
“This prolonged pressure has already led nearly 40% of consumers that KPMG surveyed to buy more value produce this year, with the same amount buying more promotional items. Plus a third of consumers reported they are shopping at lower-cost retailers or buying lower-cost branded goods.
“These actions have helped some households to manage their budget and will continue to do so, but other consumers still face far more significant price hikes in the likes of mortgage or rent – which are far harder to manage and will inevitably impact consumer spending further.”
