Discover why British consumer confidence remained steady at an almost three-year high in August, as sentiment around personal finances and major purchases improved, according to a recent survey. The GfK Consumer Confidence Index, a key indicator of economic morale, matched July's 34-month high at -13, defying expectations of a lower reading. This positive signal comes amidst a series of upbeat data from companies following Prime Minister Keir Starmer's election victory, suggesting solid growth in the economy for the second half of 2024.
Notably, enthusiasm for major purchases reached its highest level since January 2022, while the outlook for personal finances saw an uptick. Market research company GfK's client strategy director, Joe Staton, attributed this positive outlook to a recent interest rate cut and expectations of further reductions in the future.
Although the Bank of England (BoE) recently lowered borrowing costs, Governor Andrew Bailey and other officials have hinted at a more gradual approach to future rate cuts. Investors are currently pricing in a low probability of a rate cut in September, with economists forecasting only one more cut in November.
Despite the overall optimism, the GfK report indicated a slight cooling in past and future economic sentiment among respondents. The survey, conducted between Aug. 1 and Aug. 15, polled 2,003 individuals.