Consumer confidence hits two-year high in August as retail sales dip in July
Consumer confidence has risen in August to reach its highest level in two years as people feel more optimistic about making major purchases.
GfK’s Consumer Confidence Index has increased by three points to -14, with only one of the measures down.
Subscribe to TRBThe gauge for the forecast for personal finances over the next year is up three points at +4. This is one point lower than a year ago.
The measure for people’s expectations for the general economic situation over the same period has risen by five points to -23. This is seven points above August last year.
The major purchase index has also increased, rising by five points to -7, which is six points higher than last August.
However, GfK’s savings index is down five points to +22; this is eight points lower than at this time last year.
Neil Bellamy, consumer insights director at GfK, an NIQ Company, said: “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.”
In contrast figures from the Office for National Statistics (ONS) have shown that retail sales volumes are estimated to have fallen by 0.5% in July. This follows a revised increase of 0.7% in June.
Non-food stores fell by 1.3%, with a drop for clothing stores following June growth. The ONS said clothing retailers attributed the decline to earlier promotions bringing sales forward from July into June, alongside hot weather reducing footfall.
Furniture retailers reported lower demand for certain products due to the heatwave. Department stores sales volumes also fell as retailers reported issues with stock availability.
Meanwhile, food stores sales volumes rose over the month, which retailers attributed to both the weather and the World Cup.
