Consumers sceptical on major purchases but savings continue to grow – index

Client confidence edged down in August however stays above pre-pandemic ranges, in accordance with an index.

GfK’s UK shopper confidence barometer measures how households really feel about their very own monetary scenario and the broader economic system.

The general index rating in August was minus eight, dropping from minus seven in July however above the minus 9 rating in June.

Attitudes in direction of making main purchases had been the most important driver for the autumn, with sentiment turning adverse, having been in constructive territory a month earlier.

The most important buy index scored minus three in August, in contrast with a constructive rating of two in July – though the newest knowledge remains to be far increased than the minus 25 scored in August 2020.

By comparability, shoppers had been trying to financial savings as a substitute, with a constructive place of 25 – up 5 factors on final month.

Whereas the general index was nonetheless a adverse rating, indicating downbeat sentiment, it was a one-point enchancment in contrast with March 2020 earlier than the primary nationwide lockdowns hit.

Inside the general rating, households’ forecasts for his or her private funds over the following 12 months held regular in contrast with July with a rating of 11.

This was 10 factors increased than August 2020, when the rating was one.

When households had been requested how they anticipate the overall financial scenario to develop over the following 12 months, the rating on this measure was minus six, deteriorating by one level from minus 5 in July.

Households had been additionally barely extra adverse in regards to the normal financial scenario over the previous 12 months within the newest survey.

Joe Staton, consumer technique director at GfK stated: “In opposition to a backdrop of cooling headline inflation and hovering home costs, the UK shopper confidence index is steady at minus eight this August.

“Importantly, expectations for our private monetary scenario for the approaching 12 months are holding up and this positivity bodes nicely for the economic system going forwards this 12 months and subsequent.

“Curiously, this month the five-point fall within the main buy index is counterbalanced by the five-point rise within the financial savings index, suggesting that buyers might be contemplating switching into saving fairly than spending.

“Certainly, UK shoppers have constructed their financial savings to file ranges throughout Covid With the economic system persevering with to open up and GDP bouncing again, the general image for the financial well being of the nation is trying good for the rest of 2021.

“There are compelling causes right here to be cheerful as we start to place the toughest pandemic months behind us.”