Key facts
- UK consumer confidence rose to -13 in September, the highest level since August 2024.
- This marks the third consecutive monthly increase in consumer confidence.
- Rising inflation and energy costs are cited as potential headwinds to continued improvement.
- Consumers are less willing to purchase major items and more inclined to save.
- The Major Purchase Index fell by one point in September.
- The Savings Index increased by five points.
UK consumer confidence has reached its highest point in two years, with GfK's Consumer Confidence Barometer rising to -13 in September. This marks the third consecutive monthly improvement, indicating growing optimism about personal finances and the broader economy. The positive trend follows a period of increased business confidence after a change in prime minister and the introduction of measures like a cap on bus fares and business rate discounts for hospitality venues.
However, experts caution that this recovery may be short-lived. Rising inflation, particularly in energy and fuel prices, is a significant concern. Neil Bellamy, consumer insights director at GfK, noted that while the headline score is improving, confidence remains in negative territory. Consumers are showing a reduced willingness to purchase large-ticket items, with the Major Purchase Index falling by one point. Conversely, the Savings Index saw a five-point increase, suggesting a growing inclination among those who can afford it to build financial buffers.
Looking ahead, the upcoming budget on October 28 is seen as a critical event that could either bolster or derail the nascent recovery in consumer confidence. Work and pensions secretary Pat McFadden expressed confidence that Chancellor John Healey's budget will be approached responsibly and signal a stable government and an attractive environment for businesses.