Dose of caution with consumer confidence

Households misplaced some confidence within the economic system this month as the tip of the furlough scheme approached however ranges of optimism are nonetheless near document highs.

GfK’s shopper confidence index fell by one level to -8 in August as households in the reduction of spending on big-ticket objects following an preliminary increase when the economic system emerged from lockdown within the spring.

The most important buy sub-index fell by 5 factors to -3, whereas the financial savings index rose by 5 factors to 25, suggesting that households are cautious about spending their lockdown financial savings amid uncertainty about how the economic system will fare when authorities assist measures are withdrawn in September.

Though households are extra optimistic of their evaluation of how the economic system coped over the previous 12 months, they’re barely extra cautious concerning the coming 12 months. The sub-index for the overall financial scenario over the approaching 12 months slipped by one level to -6.

Regardless of rising concern concerning the future, households are nonetheless assured about their private circumstances. The furlough scheme has protected incomes over the previous 12 months and folks coming off the scheme are coming into a wholesome jobs market, with vacancies hovering and joblessness falling as companies reply to rising demand.

The sub-index for private monetary conditions over the approaching 12 months was flat at 11.

Joe Staton, shopper technique director at GfK, the German supplier of knowledge and analytics to the patron items business, stated: “In opposition to a backdrop of cooling headline inflation and hovering home costs, the UK shopper confidence index is steady at minus 8 this August. Importantly, expectations for our private monetary scenario for the approaching 12 months are holding up and this positivity bodes effectively for the economic system going forwards this 12 months and subsequent.”

“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 wanting 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.”