UK consumer confidence at highest level in 20 months

Market research company GfK’s Consumer Confidence Index suggests the economy is beginning to recover, but consumers remain under pressure.

GfK’s barometer, which is has been tracking since the 1970s, reported a four-point increase in consumer confidence to -21 in September.

“Against the backdrop of falling inflation figures, growth in wages and high interest rates, UK consumer confidence rose this month to -21, the best recorded showing since January 2022,” said Joe Staton, client strategy director at GfK.

“The view on our personal financial situation for the past year and the next is registering marginal but welcome growth, while expectations for the UK’s wider economy in the coming year show a more robust six-point increase.

“While this month’s improved headline score is good news, it’s important to note many households are still struggling with the cost of living crisis and that economic conditions are tough. The reality is that consumer confidence remains suppressed and the financial mood of the nation is still negative.”

Earlier this week, the Office for National Statistics reported a fall in inflation to 6.7%, with the largest downward contributions coming from food and accommodation prices.

The Bank of England responded to the surprising fall by holding interest rates at 5.25%.