Consumer confidence in the UK has reached its highest level in two years, signalling growing optimism among households as economic conditions gradually improve. The latest figures from the Office for National Statistics (ONS) and market research firm GfK reveal a notable uptick in public sentiment, driven by slowing inflation and steady wage growth.
Key Findings from the Survey
The GfK Consumer Confidence Index climbed to -17 in the latest reading, marking the highest score since early 2022. While still in negative territory, the improvement suggests Britons are feeling more secure about their finances compared to the peak of the cost-of-living crisis.
- Personal financial expectations rose by 3 points
- Views on the general economic situation improved by 5 points
- Major purchase intentions increased by 4 points
What's Driving the Change?
Economists attribute the boost in confidence to several factors:
- Inflation falling closer to the Bank of England's 2% target
- Real wage growth returning after months of decline
- Stabilising energy prices reducing household bills
- Improved job security in many sectors
"This upward trend in consumer confidence is particularly significant as we enter the crucial holiday shopping period," noted a GfK spokesperson. "When people feel better about their financial prospects, they're more likely to spend, which helps drive economic growth."
Regional Variations and Future Outlook
The survey revealed some regional differences, with London and the South East showing the most optimism, while Northern regions remained more cautious. Experts warn that while the trend is positive, many households still face financial pressures from higher mortgage rates and lingering debt from the cost-of-living crisis.
The Bank of England will be closely monitoring these confidence indicators as it considers future interest rate decisions. With inflation continuing to ease, many economists predict further improvements in consumer sentiment in 2024.
