UK consumer confidence rose to its highest level in two years in August, according to GfK, as optimism about personal finances and the wider economy continued to recover.
GfK’s long-running confidence index climbed three points to -14, its best reading in two years and a marked improvement on the -25 recorded as recently as April.
Four of the five data points measured by GfK rose on the month.
Households were notably more upbeat about the year ahead. The gauge of expectations for personal finances over the next 12 months rose three points to +4, while confidence in the broader economy improved five points to -23, its best since August 2024.
The major purchase inde, a signal of willingness to spend on big-ticket items, jumped five points to -7, its highest since December 2021.
But not every measure improved. The view of the general economy over the past year slipped a point to -40, and the savings index, which sits outside the headline score, fell five points to +22.
Neil Bellamy, Consumer Insights Director at GfK, an NIQ Company, said: “Consumer sentiment has continued to improve this summer with August’s headline score up three points to -14, its highest level for two years and well ahead of the -25 registered just four months ago in April.
“There is increased optimism looking ahead to the next 12 months for personal finances (up three points to 4) and more people also think now is a good time to make a major purchase (up five points to -7, the highest since December 2021). There is similar optimism on economic prospects over the next 12 months. While still deep in negative territory, this measure is up five points to -23, the best since August 2024, shortly after Keir Starmer took office.
“Does all this mean that people have greater faith in the new government to increase growth and job opportunities? Can consumers finally see an end to the cost-of-living crisis? It would be tempting to say yes, but frankly it’s too soon to tell. With inflation back on the rise – now at 2.9% and the highest in four months – and with continued uncertainty in the Middle East and elsewhere, there are still many challenges ahead that will test the mettle of UK consumers.”