UK consumer confidence matches almost 3-year high in August
2024.08.22 21:30
(Reuters) – British consumer confidence held at an almost three-year high in August, bolstered by improving sentiment around personal finances and major purchases, according to a survey on Friday that added to positive signals in the wider economy.
The GfK Consumer Confidence Index, Britain’s longest-running gauge of economic morale among members of the public, was steady in August at -13, matching July’s 34-month high. A Reuters poll of economists had pointed to a reading of -12.
The survey follows mostly positive data from companies since Prime Minister Keir Starmer’s Labour Party won a landslide election victory last month. Business surveys put the economy on course for solid growth in the second half of 2024.
The survey’s measure of enthusiasm for major purchases rose to its highest level since January 2022, while the outlook for personal finances also notched higher.
“This more positive outlook may be due to a mortgage-friendly interest rate cut at the beginning of August, and hopes of more to come,” said Joe Staton, client strategy director at market research company GfK.
The BoE cut borrowing costs from a 16-year high of 5.25% earlier this month but Governor Andrew Bailey and other top officials have signalled they might not follow that up with rapid further reductions in rates.
Investors were assigning a less than 30% chance of a September rate cut on Thursday.
A Reuters poll of economists published on Wednesday suggested the BoE will cut interest rates just once more this year, in November.
The GfK report’s gauges of past and future economic sentiment cooled, however.
The survey of 2,003 people took place between Aug. 1 and Aug. 15.
