In another positive sign for the economy, consumer confidence has hit a two-year high in August, according to a survey released overnight.
A long-running monthly index measuring consumer sentiment by GfK improved to -14, up from -17 in July (though yes, those figures are still in the minuses…).
Neil Bellamy, consumer insights director at GfK, sounded a note of caution:
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.
The survey found that more people think it is a good time to make a major purchase, with that part of the index rising five points compared with July to -7. The index measuring personal finances, meanwhile, ticked up two points to -6.
It comes after a swathe of measures from new Prime Minister Andy Burnham designed to alleviate the pressure on household finances, such as capping bus fares and cutting VAT from energy bills.
While those negative readings may not look terribly optimistic, they are at least heading in the right direction. Whether that continues with rising energy bills and a Budget around the corner is another matter…
Thomas Pugh, the chief economist at consultancy RSM UK, added:
Consumer confidence rose to a two-year high in August, suggesting that consumers remain unfazed about renewed tensions in Iran and the risk of another tax raising Budget in the autumn.
